SoFi Technologies closed at $14.22, down 6.69%, marking a 52-week low for the digital financial services platform. The decline coincided with broader market weakness driven by hotter-than-expected inflation data, which has reignited fears of higher interest rates and pressured lenders.
The session saw heavy trading activity, with volume reaching 90.7 million shares. This figure was approximately 108% above the stock's three-month average of 53.6 million shares. Despite the recent drop, SoFi shares have grown 13% since the company's 2021 initial public offering.
The pressure on SoFi was part of a wider sell-off in the fintech sector. The S&P 500 closed at 7,719, down 1.11%, while the Nasdaq Composite fell 1.88% to 26,693. Other key players in the space also suffered significant losses; Robinhood Markets dropped 8.54% to $101.08, and Affirm fell 9.74% to $70.51 as rate concerns dragged on the group.
Investors are particularly concerned about SoFi's exposure to lending, which accounts for a significant share of its revenue. With shares falling almost 50% from last year's high, the market is pricing in potential near-term pressure from a high-rate environment, even as the company continues to expand its membership and increase revenue. The next major catalyst for the stock is its earnings report scheduled for October 27.
Analyst sentiment remains divided on the stock's outlook. Benchmark upgraded SoFi to a "Strong Buy" rating earlier this week. In contrast, Keefe, Bruyette & Woods maintained its "Underperform" rating and lowered its price target to $15.
Beyond traditional banking metrics, SoFi is pursuing growth in the stablecoin market through its partnership with Mastercard. The collaboration allows for settlement in SoFiUSD, a dollar-pegged coin created by the company. While the blockchain payments sector is still evolving, proponents point to lower costs and faster transactions as potential advantages that could position SoFi favorably in global payments.