Could Buying SoFi Stock Today Set You Up for Life?
SoFi's stock has gained about 185% over the past 12 months.
Its shares are priced for perfection, and competition in the fintech space is fierce.
The stock isn't a bad investment, but it probably won't set you up for life.
10 stocks we like better than SoFi Technologies ›
SoFi Technologies (NASDAQ: SOFI) plays a leading role in the financial technology (fintech) space right now, with the company's laundry list of financial services ranging from savings accounts and loans to even crypto trading.
The company's early moves into fintech and its ability to expand its services and customer base have made its stock a must-have among many investors, boosting it more than 230% over the past three years. Those gains are more impressive when you consider that even some tech giants like Microsoft, which are benefiting from an artificial intelligence boom, have seen their share price double over the period. Impressive, sure, but far behind SoFi's gains.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
The question now for potential investors is whether the stock can continue to put up staggering returns that could set an investor up for life. There's no question that SoFi has been successful, but it's doubtful the stock will continue its rapid rise. Here are three reasons why.
1. SoFi is already priced for perfection
The downside of SoFi's share price rising so quickly is that it has significantly raised its valuation, making it priced for perfection. It has a price-to-earnings ratio (P/E) of about 50, much higher than the average P/E multiple of 29 for the S&P 500 index.
Sure, most stocks across nearly every sector look historically expensive right now. But SoFi is still frothy, even in the current market. Any earnings or revenue misses in an upcoming quarterly report or negative news could cause the stock to fall.
Buying it now means you're paying a premium for the stock, and with expectations riding high, there will be a point when quarterly results don't match investors' expectations.
2. Tariffs aren't in the rearview mirror yet
News moves so fast these days that it can seem like the tariffs the Trump administration announced in April are in the distant past. But the administration still has many tariffs in place and recently announced new ones.
The first wave of tariff uncertainty sparked a massive sell-off in the market, and SoFi's shares fell too, tumbling 17% in just a few days.
While stocks have since rebounded, the fact remains that investors know high tariffs could be bad for the economy. Inflation ticked up slightly higher to 2.7% in June, with at least some of the blame going to tariffs. If inflation continues to rise, and Americans cut back on their spending, that could significantly affect SoFi's growth.
The fintech relies on its members spending money, taking out mortgages and personal loans, and using their credit cards. If the economy slows because of tariffs, then it's likely some SoFi members will stop using the company's products as frequently. And, in the worst-case scenario, a significant economic slowdown or recession could make it difficult for some members to continue paying on their loans.
3. Fintech is fiercely competitive
All companies have competitive risks, but the fintech sector takes competition to a new level. Consider the companies that have at least one product similar to SoFi's, including Wells Fargo, Apple, Block, Robinhood, Klarna, PayPal, and many more.
Financial services used to be what banks did. Now, tech companies offer financial services, and even have bank charters, like SoFi. And while SoFi's services have been lucrative -- its earnings soared 200% in the most recent quarter to $0.06 per share -- it also means that small fintech companies and large tech companies are constantly creeping into each other's territory.
This may be one of the most significant reasons why SoFi may not be the best stock to set you up for life. Too many other companies offer great financial services to customers through sleek and easy-to-use apps. While it has built some advantages in fintech by offering a variety of services, I think it's still too early to assume that its competition can't eventually take away some of its members.
To be clear, I don't think SoFi is a bad investment. I just don't think it's a stock that will set you up for life. If you're inclined to buy the company's shares right now, I would start with a small position. And if the stock gives up some of its gains, then maybe add a little more. But with the shares up 185% over the past 12 months, the likelihood of similar returns looks slim.
Should you invest $1,000 in SoFi Technologies right now?
Before you buy stock in SoFi Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!*
Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 15, 2025
Wells Fargo is an advertising partner of Motley Fool Money. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple, Block, Microsoft, and PayPal. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBC
22 minutes ago
- CBC
LeBlanc says he expects Carney, Trump to talk 'over the next couple of days'
Social Sharing Dominic LeBlanc says he expects Prime Minister Mark Carney and U.S. President Donald Trump will have a conversation with each other "over the next couple of days" as Canada tries to find a way out of a 35 per cent blanket tariff on exports to the U.S. "We believe there's a great deal of common ground between the United States and Canada in terms of building two strong economies that work well together," said LeBlanc, the minister responsible for Canada-U.S. trade, on CBS's Face The Nation. LeBlanc left Washington earlier this week without a deal, but he told host Margaret Brennan he came out of discussions "with a better understanding of the American concerns in the trading relationship…. So we're prepared to stick around and do the work needed." Few Canadian goods subject to new rate On Friday just after midnight, Canada's tariff rate rose to 35 per cent following a Trump executive order that criticized Canada's "lack of co-operation" in curbing the flow of fentanyl southward and for retaliating against Trump's existing tariffs. But only a very small number of Canadian products will actually be subjected to that rate — specifically goods not covered by the Canada-U.S.-Mexico Agreement, which governs trade between the three countries. WATCH | LeBlanc insists there wasn't a good deal before Trump's Aug. 1 deadline: No trade deal with U.S. better than a bad one, LeBlanc says 2 days ago LeBlanc told Brennan that Canada was "obviously disappointed" by Trump's decision to raise the tariff rate. In a separate interview on Face The Nation, U.S. Trade Representative Jamieson Greer said Canada was the only country aside from China to retaliate against Trump's tariffs. "If the president is going to take an action and the Canadians retaliate, the United States needs to maintain the integrity of our action — the effectiveness — so we have to go up," Greer told Evans. Trump tariffs face legal challenge When asked whether Canada should drop its countertariffs, LeBlanc cited Ottawa's 25 per cent countertariff on U.S. steel and aluminum imports. "There's a 50 per cent tariff when we want to sell [steel] into the United States, so effectively we're blocked from doing that. But the national security interest of Canada requires we have a viable steel and aluminum sector." Trump invoked his 35 per cent levy using a law that allows the U.S. president to take emergency economic measures to "deal with any unusual and extraordinary threat" to national security. That tariff is facing a legal challenge that has now reached a federal appeals court, putting it further along in the U.S. court system than any other tariff lawsuit.
Globe and Mail
an hour ago
- Globe and Mail
3 Top REIT Dividend Stocks to Buy in August for Passive Income
Key Points Mid-America Apartment Communities has increased its dividend for 15 years in a row. Invitation Homes has raised its payment every year since it went public. Realty Income has one of the best dividend growth streaks in the REIT sector. 10 stocks we like better than Realty Income › Investing in real estate investment trusts (REITs) is a great way to generate passive dividend income. Most REITs own large portfolios of income-generating real estate, which provide them with the cash flow to pay attractive dividends. Mid-America Apartment Communities (NYSE: MAA), Invitation Homes (NYSE: INVH), and Realty Income (NYSE: O) are three top REITs due to their consistent dividend growth, strong financial profiles, and high-quality portfolios. Those features make them great stocks to buy for passive income this August. Capitalizing on growing apartment demand Mid-America Apartment Communities has an excellent record of paying dividends. The landlord recently declared its 126th consecutive quarterly dividend. It pays $6.06 per share each year, giving it a more than 4% yield at its recent share price. Mid-America has never reduced or suspended its dividend in its more than 30 years as a public company and has raised the payout for 15 years in a row. The REIT should have no trouble continuing to increase its dividend. Demand for apartments in the Sun Belt region where it operates is strong and growing, while new supplies should be limited in the future. That should keep occupancy levels high across its portfolio and drive steady rent growth. Meanwhile, Mid-America Apartment Communities currently has nearly $1 billion of apartment development projects underway that it expects to complete over the next few years. It also recently completed four projects and acquired two new communities in the lease-up phase for nearly $575 million. "The strengthening demand/supply dynamic coupled with our growing development pipeline, which is nearing $1 billion, should support robust revenue and earnings performance and enhance long-term value creation," stated CEO Brad Hill in the REIT's recent second-quarter earnings report. Cashing in on demand for rental housing Invitation Homes stands out for its consistent dividend record. Since its initial public offering in 2017, this REIT, which specializes in single-family rental homes, has increased its payout each year. The current dividend is $0.29 per share quarterly ($1.16 annually), giving it a yield approaching 4% at the most recent share price. The REIT owns and manages single-family rental properties in high-demand housing markets. That drives healthy rent growth (4% in the second quarter). Additionally, Invitation Homes steadily invests capital to grow its rental property portfolio. It spent $350 million to buy over 1,000 homes in the second quarter. The REIT also provided a developer with $33 million in funding to build a 156-home community that it can acquire in the future. These investments are providing it with incremental sources of income to support its steadily rising dividend. The name says it all Realty Income has one of the best dividend track records in the REIT sector. The company has increased its monthly dividend 131 times since its public market listing in 1994, including the past 111 straight quarters. At the REIT's current payment level ($0.269 per share a month and $3.228 annually), it has a yield approaching 6%. The diversified REIT backs that payout with very stable rental income. It leases its retail, industrial, gaming, and other properties to many of the world's leading companies under long-term triple-net (NNN) agreements. Those leases require that tenants cover all property operating costs, including routine maintenance, real estate taxes, and building insurance. Realty Income also has a very strong financial profile. That gives it the flexibility to continue acquiring properties secured by long-term net leases. It currently expects to invest about $4 billion this year to expand its portfolio. These new investments will enable the REIT to continue increasing its high-yielding monthly dividend. High-quality, high-yielding REITs Mid-America Apartment Communities, Invitation Homes, and Realty Income pay high-yielding and steadily rising dividends. With more growth ahead, they're great REITs to buy this month to collect a rising stream of passive dividend income. Should you invest $1,000 in Realty Income right now? Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
National Post
an hour ago
- National Post
U.S. trade advisor says Trump tariff rates unlikely to change
New U.S. tariff rates are 'pretty much set' with little immediate room for negotiation, Donald Trump's trade advisor said in remarks aired Sunday, also defending the president's politically driven levies against Brazil. Article content Trump, who has wielded tariffs as a tool of American economic might, has set tariff rates for dozens of economies including the European Union at between 10 and 41 percent come August 7, his new hard deadline for the duties. Article content Article content Article content In a pre-taped interview broadcast Sunday on CBS's 'Face the Nation,' US Trade Representative Jamieson Greer said 'the coming days' are not likely to see changes in the tariff rates. Article content Article content 'A lot of these are set rates pursuant to deals. Some of these deals are announced, some are not, others depend on the level of the trade deficit or surplus we may have with the country,' Greer said. Article content 'These tariff rates are pretty much set.' Article content Undoubtedly some trade ministers 'want to talk more and see how they can work in a different way with the United States,' he added. But 'we're seeing truly the contours of the president's tariff plan right now with these rates.' Article content Last Thursday, the former real estate developer announced hiked tariff rates on dozens of US trade partners. Article content They will kick in on August 7 instead of August 1, which had previously been touted as a hard deadline. Article content Among the countries facing steep new levies is Brazil. South America's largest economy is being hit with 50 percent tariffs on exports to the United States — albeit with significant exemptions for key products such as aircraft and orange juice. Article content Article content Trump has openly admitted he is punishing Brazil for prosecuting his political ally Jair Bolsonaro, the ex-president accused of plotting a coup in a bid to cling to power. The US president has described the case as a 'witch hunt.' Article content Greer said it was not unusual for Trump to use tariff tools for geopolitical purposes. Article content 'The president has seen in Brazil, like he's seen in other countries, a misuse of law, a misuse of democracy,' Greer told CBS. 'It is normal to use these tools for geopolitical issues.' Article content Trump was 'elected to assess the foreign affairs situation … and take appropriate action,' he added. Article content Meanwhile White House economic advisor Kevin Hassett said that while talks are expected to continue over the next week with some US trade partners, he concurred with Greer's tariffs assessment in that the bulk of the rates 'are more or less locked in.' Article content Asked by the host of NBC's Sunday talk show 'Meet the Press with Kristen Welker' if Trump could change tariff rates should financial markets react negatively, Hassett said: 'I would rule it out, because these are the final deals.' Article content An appeals court panel on Thursday appeared skeptical of the government's arguments, though the case may be ultimately decided at the Supreme Court. Article content
