What Happened?
Shares of digital financial services company SoFi Technologies (NASDAQ: SOFI) fell 13.5% in the afternoon session after its first-quarter earnings results were overshadowed by a disappointing financial outlook for the second quarter.
The digital financial services company reported better-than-expected first-quarter revenue of $1.1 billion, a 42.8% increase year-over-year, and posted an adjusted profit of $0.12 per share, which was in line with analyst expectations.
However, investor sentiment soured on the company's guidance for the upcoming second quarter. SoFi projected revenue growth of 30% and an EBITDA margin of 30%, both of which missed Wall Street's forecasts. While the company maintained its full-year revenue outlook, the weaker near-term forecast sparked concerns about its growth trajectory, leading investors to sell off the stock.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy SoFi? Access our full analysis report here, it’s free.
What Is The Market Telling Us
SoFi’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. But moves this big are rare even for SoFi and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 4.4% on the news that major banks and asset managers reported first-quarter earnings that surpassed Wall Street expectations.
Leading the charge, giants like BlackRock, Bank of America, and Morgan Stanley all announced profits that topped analyst forecasts, driven by a significant rebound in investment banking and robust trading activity.
According to reports, Bank of America saw record equities trading, with revenues up 30%, while Morgan Stanley's trading desk saw a 25% rise. This surge was partly due to recent market volatility, which increases trading volumes and generates higher revenues for these firms.
Additionally, a healthier climate for mergers and acquisitions bolstered investment banking divisions, signaling renewed corporate confidence and providing a powerful tailwind for the financial industry to start the year.
SoFi is down 42.2% since the beginning of the year, and at $15.88 per share, it is trading 50.7% below its 52-week high of $32.21 from November 2025. Investors who bought $1,000 worth of SoFi’s shares 5 years ago would now be looking at only $911.30.
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