MARKET RECAP
😰 The S&P Loses Momentum As Trump Announces New Tariffs

🫥 After steady gains last week, with the market hitting all-time highs, this week, all the major indexes fell flat as Trump announced a new 35% tariff on Canada imports, 25% on Japan and South Korea, along with 20 other nations starting August 1:

• The S&P 500 was flat at +0.01%

• The Nasdaq-100 was flat at +0.12%

• The TSX was flat at -0.02%

😰 To make matters worse, yesterday (after markets were already closed for the weekend), Trump annouced 30% tariffs on the EU and Mexico, also taking effect August 1, dashing hopes that deals would be reached before the end of Trump’s 90-day tariff pause.

🙏 Despite the escalation, many investors are still hopeful, seeing the moves as just another page in Trump’s negotiation playbook:

📉 As many experts have noted, if these tariffs actually do come into effect on August 1, it will be ‘pretty devastating’ for the markets, but most investors seem to be taking a ‘wait and see’ approach.

⭐️ But despite the flat week for the market overall, one popular Blossom stock was flying high this week, climbing +14% after announcing new ‘private-market funds’ that offer exposure to start-ups like OpenAI and SpaceX: Sofi Technologies ($SOFI)

TOP STORY
🏦 What is SoFi Technologies?

🏆 One of the reasons I wanted to cover SoFi today is that I’m fairly unfamiliar with the company, despite it rising in the ranks to the #39th Most Held position in Canada and the #16th Most Held in the US on Blossom.

📈 Over the past year, the stock has soared +200%, meaning $1,000 invested in the company would be worth over $3,000 today.

So first off, what is SoFi, and how do they make money?

Starting as a student loan marketplace back in 2011, SoFi has expanded into a ‘financial super app’ that makes its money across 3 main verticals:

1. 💰 Lending (50% of revenue): Core lending offerings across personal, student, and home loans

2. 📈 Financial Services (37% of revenue): SoFi Money (banking, high interest accounts, etc), SoFi Invest (commission-free trading), Credit Cards, etc.

3. 🏦 Technology Platform (13% of revenue): Software and APIs offered to banks and fintechs

🚀 Recent Earnings and Growth

🤑 One of the reasons for SoFi’s incredible stock growth has been consistently strong user, revenue, and earnings growth.

⭐️ In its most recent quarter, SoFi brought in a record 800,000 new customers (bringing its total close to 11M) and delivered ~20% annual revenue growth.

📈 Financial Services has been the biggest growth for SoFi by a long shot, with over 100% year-over-year growth in its most recent quarter.

Ok - now that we know a bit more about SoFi, let’s dive into why the stock jumped 14% this week and what analyst are saying about the soaring Fintech player… but first, a quick word from today’s sponsor Public!

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TOP STORY CONT.
🚀 SoFi Jumps +14% After Announcing Private Market Funds

🤔 Now that we know what SoFi does, why did the stock jump 14% this week? Well, ironically, it’s for a similar reason to Robinhood last week. On Tuesday, SoFi launched ‘Private Market Funds’, enabling retail investors to get private market exposure, particularly in hot private companies like OpenAI and SpaceX.

🤝 While Robinhood did this through tokenized stocks (which don’t even have any real exposure to the underlying security), SoFi is doing this through partnerships with portfolio managers like Cashmere, Carlyle, and Franklin Templeton, which have real ownership in the private companies.

🔥 While most private market funds require a $25,000 minimum investment, these funds have investment minimums as low as $10, significantly reducing the barrier for retail investors.

📈 So, Can SoFi Keep Climbing?

So, with all the hype around this growing Fintech, can it keep climbing or will it all come crashing down? Here are a few factors to consider:

🪙 Getting Back Into Crypto

Back in 2023, SoFi had to wind down its crypto investing services as a condition of receiving its bank charter.

But as Trump has since loosened the rules, in late April, SoFi announced plans to push back into crypto with plans to offer crypto investing again by the end of this year.

As we know from Robinhood, crypto is big business, accounting for half of Robinhood’s revenue growth over the past year and growing to over 27% of revenue. Many experts see crypto as a bit opportunity for SoFi, and I would tend to agree.

📊 Is the Valuation too High?

⚠️ The number 1 criticism of the stock has been its valuation. With a forward Price to Earnings ratio of 72x (a common measure of how ‘expensive’ a stock is), the stock is trading much higher than the average forward PE of 23x across the S&P 500.

📈 Now, the counter-argument is that SoFi’s revenue growth is much higher than the average S&P 500 stock (with 37% compound growth), and if you compare it to peers like Robinhood (70x) and Coinbase (71x), it’s right in line with other Fintechs.

✨ With six consecutive quarters of GAAP profitability, SoFi has demonstrated efficient scaling while maintaining profitability. The company has also done well to diversify it’s revenue away from lending, leaning more into the high-margin, capital light businesses of Financial Services.

🥊 Still, some analysts say that the stock has “run past its fundamental value” and others point to the increased competition in the space as banks like Chase, Bank of America, and JPMorgan, focus more heavily on retail investors.

One analyst sums it up nicely:

💡 My Thoughts

🤔 After all my research on the stock, I find SoFi really compelling and am considering buying the stock, but would love to hear from you all if there’s anything I’m missing… if you have thoughts, please share them on my post in Blossom here!

ALSO IN THE NEWS
🗞️ Other Key Headlines this Week

🚘 Tesla Jumps 8% Despite Elon Announcing New Political Party

• Tesla ($TSLA) climbed 8% after rebounding from a ~7% drop earlier in the week after Elon Musk announced his new political party the “America Party” on July 5

• Wedbush Analyst Dan Ives said investors are “exhausted” and want clearer boundaries, citing fears about brand damage and governance

• Tesla’s swift rebound shows continued retail support, but Musk’s political antics continue to cast a shadow, especially as the company navigates key milestones like robotaxis and self-driving tech.

✈️ Delta, United, and American Airlines Soar Over After Bookings Rebound and Strong Q2 Earnings

• Delta ($DAL) jumped 12% after reporting Q2 revenue of $15.5B and pre-tax profit of $1.8B

• United ($UAL) rose 7% and American Airlines ($AAL) gained 5% ahead of earnings, boosted by optimism from Delta’s earnings

• The boom was largely driven by a jump in premium and business travel, as corporate travel has returned to pre-pandemic levels

🏆 Nvidia Becomes the 1st Company to Hit a $4T Valuation

• Nvidia ($NVDA) surpassed a $4 trillion market cap on July 9, becoming the first publicly traded company to reach the milestone.

• The stock is up about +28% over the past 12 months and +19% year-to-date.

• Demand for Nvidia’s AI chips and software ecosystem continues to surge, led by its Blackwell GPU platform and expanding data center footprint.

📈 SoundHound AI Jumps 12% On Strong Progress On Agentic AI Voice Tech

• SoundHound ($SOUN) surged ~12% early this week and ended the week up 5%, after investors cheered its push into agentic AI voice agents

• The company’s Amelia 7.0 and Polaris models power autonomous voice assistants, with deployments in restaurants, healthcare, automotive, and enterprise settings

• Active partnerships with Hyundai, Kia, Oracle, Chipotle, and Allina Health signal broad enterprise traction

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

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