The S&P 500 has experienced a remarkable surge, rising by 92% this year, leading to speculation about the possibility of a stock market bubble. While uncertainties linger regarding short-term fluctuations, the stock market has historically been a dependable avenue for wealth creation, particularly for long-term investors who can weather periods of volatility. Many are now questioning whether a stock market bubble is forming and if it could burst, though this concern may not be crucial for those looking to invest for the long haul.
Amid this environment, SoFi Technologies is emerging as a notable player in the financial landscape. The company, part of a group of digital banks revolutionizing how Americans handle their finances, offers a comprehensive online platform designed for ease of use and a wide array of services. SoFi distinguishes itself with its all-in-one banking model, which enables customers to manage multiple financial needs seamlessly.
Historically rooted as a lending cooperative aimed at supporting university students, SoFi has retained a strong focus on lending—this sector still comprises about 50% of its total revenue. In the third quarter of 2025, SoFi reported lending revenues of $493 million. The company primarily targets young adults, initiating relationships with products like student loans and subsequently encouraging users to expand their financial engagement by eventually adopting additional products, such as credit cards, savings accounts, and mortgages.
Recent financial disclosures indicate that SoFi’s growth trajectory is solid. In the latest quarter, adjusted net revenue soared by 38% year over year, with earnings per share doubling from $0.05 to $0.11. The lending segment alone saw a 25% increase, while the Tech Platform revenue, which caters to business clients, rose by 12%. However, the most significant growth was recorded in the financial services segment, where revenues skyrocketed by 76% and contribution profit surged by 126%, driving the contribution margin up by 12 percentage points to reach 54%.
Innovative product offerings have been well-received in the market, including the recent reintroduction of cryptocurrency trading within its app and the launch of a global remittance service. The current lower interest rate environment is advantageous for SoFi, given that it reduces borrowing costs and generally stimulates the economy by increasing available capital.
Despite this promising outlook, certain risks remain. Last year posed challenges for SoFi, as elevated interest rates threatened to undermine its lending operations. This risk is particularly pronounced for smaller banks like SoFi, where fluctuations in the lending segment can have a more significant impact. However, as SoFi expands and diversifies its product offerings, it may mitigate the cyclical risks typical in the banking industry.
Additionally, SoFi’s current market valuation raises some concerns, as it trades at a high price-to-earnings (P/E) ratio of 52 and a price-to-book ratio of 4. While these figures are steep for a banking institution, they reflect SoFi’s rapid growth trajectory, indicating that it might eventually align with its valuation.
Looking ahead, there are compelling reasons for optimism regarding SoFi’s future. The company has displayed a track record of resilience, efficiency, and innovation, successfully attracting new customers at an impressive rate, with 905,000 new accounts opened in the third quarter alone. Furthermore, a significant number of new product sales are coming from existing customers, underscoring the effectiveness of its cross-selling strategy.
SoFi management has set ambitious aspirations, targeting a position among the top 10 banks in the U.S. As revenue and earnings continue to climb, the company’s stock could experience significant appreciation in the upcoming years, presenting an opportunity for investors looking to build wealth over time.
