Welcome back to Hypergrowth Investing, your source for the best insights on the hottest stocks in the market!
This week, we’re starting off with one of our all-time favorites – SoFi (SOFI). This company is not only surviving, but thriving in the midst of a banking crisis that has shaken the industry.
If you’re not familiar with this name, SoFi is a fintech powerhouse that offers a wide range of financial products and services, from loans and investing to banking and insurance. It has a loyal customer base that uses its super app for all their financial needs. And unlike traditional banks, SoFi has no branches, no legacy systems, and no regulatory headaches.
We’ve always called SoFi the “Amazon of Finance” because of its all-in-one super app. And it seems the parallels are getting stronger with this banking crisis. Amazon (AMZN) didn’t start its e-commerce takeover until the sector had a major crisis – the dot-com crash. When countless internet startups went bust, hoards of consumers migrated to Amazon.com. The company gained tons of market share and continued to grow responsibly as its competitors went bankrupt. And that’s kind of what we’re seeing with SoFi right now.
And much like Amazon during the dot-com bubble, SoFi is well-positioned amid the turmoil in the banking sector. You’ve probably heard about the failures of Silicon Valley Bank and Signature Bank, the near-collapse of Credit Suisse (CS) and First Republic (FRC), and the massive deposit outflows from many other regional banks. These events have eroded consumer confidence and trust in the banking system, and have created an opportunity for SoFi to gain market share and grow its deposits.
For its part, SoFi has seen no deposit outflow, and CEO Anthony Noto even said he expects deposit growth to be on par or better than it was last quarter. In fact, SoFi recently announced that it has increased its FDIC insurance coverage from $250,000 to $2 million per account – 8X higher than the national average. This move shows that SoFi is serious about protecting its customers’ money and providing them with peace of mind. And as a result, SOFI stock has been soaring, while most bank stocks have been tanking.
While its competitors are struggling, SoFi is thriving in spite of the chaos. We expect that the company’s growth will accelerate because of the banking crisis. This is an “Amazon moment” for the upstart fintech – a chance to capitalize on a crisis and emerge as a dominant player in the financial industry. We expect SoFi to continue to innovate, expand, and deliver strong results in 2023 and beyond. That’s why we’re bullish on SOFI stock, and we think you should be too.
Thanks for watching Hypergrowth Investing. Don’t forget to like, subscribe, and hit the bell icon for more videos like this one. See you next time!
On the date of publication, Seth Kuczinski did not have (either directly or indirectly) any positions in the securities mentioned in this article.