Robinhood Stock: Top Funds Funnel Cash Into Crypto-Fueled Broker. Here's Why.

In addition to popping onto the IBD Leaderboard watchlist, online broker Robinhood Markets (HOOD) also made this month's list of new buys by the best mutual funds. These top-performing institutional investors poured $1.12 billion into Robinhood stock.

Last week, Robinhood announced it will acquire WonderFi, a Canadian leader in digital asset products and services. WonderFi will join Robinhood Crypto and continue to deliver crypto products to Canadian customers. And boosted by 106% earnings growth last quarter, Robinhood stock stands poised to launch a new breakout.

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Robinhood Online Mobile Trading Apps In Vogue

Particularly popular among millennials, the Robinhood app facilitates trading of stocks, options and exchange traded funds, as well as cryptocurrency. Recently, the company has seen solid growth of usage in retirement-related products. In this year's 13th annual special report on the Best Online Brokers, Robinhood got high grades for its online mobile trading apps.

On April 30, the online broker reported earnings of 37 cents per share, marking a 106% year-over-year spike. Revenue rose 50% to $927 million.

For the second quarter, analysts forecast sales growth of 30% to $883.7 million and earnings growth of 42% to 30 cents per share. For the full year, Wall Street expects Robinhood to post 19% earnings growth to $1.29 a share.

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Robinhood Stock Rebounds, Poised To Pop

Although it initially fell after reporting first-quarter earnings, Robinhood stock quickly rebounded. It has now formed a new buy point at 66.91 with its relative strength line rising sharply. The online broker may form a handle to offer an earlier entry.

In another sign of rising technical strength, the 21-day moving average has jumped back above the longer-term 50-day line.

In addition to making the latest list of new buys by top funds, a B Accumulation/Distribution Rating and 1.2 up/down volume ratio also point to demand for Robinhood stock.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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