Why SoFi Technologies stock fell 2.1% today
Sofi Technologies (SOFI -2.12%) saw its stock price drop 2.1% on Wednesday. It had risen 1.9% around 10:30 a.m. ET but fell and ended the day at $5.55 per share. The stock price is down about 65% since the start of the year.
It was a mixed day on Wall Street as the Dow Jones Industrial Average gained 2 points, the S&P500 fell by 28 points (0.7%) and the Nasdaq Compound lost 228 points (2%).
On Wednesday, no specific catalyst dragged online bank and lender SoFi Technologies. Instead, fintech likely felt the pull of some top tech companies that underperformed in the third quarter.
The big one was Alphabet, which missed revenue and earnings estimates and ended the day down 9.6%. And while Microsoft beat earnings expectations, the stock fell 7.7% as cloud revenue fell short of estimates.
The Nasdaq fell on the news, ending the day down 228 points, or 2%, and it dragged fintechs including SoFi down with it.
The Nasdaq slump erased early gains for SoFi, which was up about 1.9% at the start of the trading day on strong third-quarter earnings from Visa. Visa beat revenue and earnings estimates with earnings up 19% year-over-year on the back of a 10% year-over-year increase in gross payment volume, driven by the increase in consumer spending. Visa shares rose 4.7% on the day.
SoFi investors should put aside lackluster results from the tech giants and focus on Visa’s strong quarter. Rising consumer spending led to gains in both transactions and gross payment volume for Visa, which is a good sign for the bank and its digital payments platform, Galileo, which relies on spending, loans and economic growth.
SoFi is a great value with plenty of upside earnings, but investors will get a better idea of SoFi’s situation when it reports third-quarter results next week, November 1.
Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Dave Kovaleski has no position in the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Microsoft and Visa. The Motley Fool has a disclosure policy.