Piotr Swat | SOPA Images | Light Rocket | Getty Images
Robinhood stock is headed for a brutal week-on-week decline as the once-booming trade in Bitcoin and AI stocks that fueled the company’s growth has lost momentum.
The trading platform’s stock price fell 10.1% on Thursday, extending its steep decline and taking the stock down 13.3% this week. The downturn has wiped out more than 27% of Robinhood’s value as of November, a dramatic drop from its strong performance earlier this year. Shares were slightly higher in pre-market trading on Friday.
The latest slide reflects a sharp reversal in the risky investment activity that Robinhood relies on. The company’s core business is closely tied to the speculative corner of the market, particularly retail investors who flock to cryptocurrencies and hot artificial intelligence stocks.
These trades helped fuel a rebound in Robinhood’s revenue and user engagement earlier this year as Bitcoin hit new highs and everything related to artificial intelligence soared. However, recent declines in crypto stocks and high-growth tech stocks have exposed Robinhood’s sensitivity to fluctuations in sentiment.
Bitcoin has fallen about 12% this week alone, hitting a new low of $80,548.09 on Friday, its lowest since April. Nvidia’s stock price, which enables AI, fell 5% this week.
