Is SoFi (SOFI) Better Than SpaceX?

We just covered Avoid SpaceX and Buy These 11 Stocks Instead. SoFi (NASDAQ:SOFI) ranks #9 (see Avoid SpaceX and Buy These 5 Stocks Instead).

Number of Hedge Fund Investors: 47

SoFi (NASDAQ:SOFI) is a fintech bank that offers personal loans, student loan refinancing, and financial services. It sells checking accounts, investment accounts, credit cards, crypto, and subscription services to its members. Its customers are mostly people refinancing expensive credit card debt into cheaper personal loans. The moat is the network effect of having 14.7 million members locked in, and the ability to upsell them more products over time.

The stock is down 34 percent this year because of how SoFi accounts for loans. When SoFi (NASDAQ:SOFI) originates a loan, it doesn't wait to collect interest payments over time. Instead, it records all the future interest it will earn from that loan on day one. So if you borrow $100,000 and will pay $30,000 in interest over five years, SoFi counts that $30,000 as profit immediately. It's not cash. It's an estimate of cash that will come later. The market worries that if borrowers default, those estimates were wrong and the earnings evaporate. That's why the stock got crushed.

But here's the bull case. The core business is getting stronger, not weaker. Deposits have grown 2.2x in just over two years. That's cheap funding. The company is no longer dependent on expensive market debt, which has fallen 64 percent. Customers are buying more products per account. The upselling rate is accelerating. Revenue is growing 41 percent year over year. The company is profitable with ten consecutive quarters of GAAP profits. Operating leverage is kicking in as expenses grow slower than revenue.

The biggest growth catalyst is the massive installed base of members who haven't been monetized yet. SoFi (NASDAQ:SOFI) has 14.7 million members but many only use the free checking account. Those members represent a pipeline of growth the company can upsell without spending more on marketing. The acquisition cost is already paid. Upselling them to lending products, investment accounts, or the $10-per-month subscription is nearly free to execute.

A second catalyst is the Loan Platform Business, where SoFi originates loans for third parties and collects fees without holding the risk. That business grew from $268 million annualized run-rate to $775 million in less than a year. It's capital-light and doesn't require deposits to fund.

Polen 5Perspectives Small-Mid Growth Strategy stated the following regarding SoFi Technologies, Inc. (NASDAQ:SOFI) in its Q1 2026 investor letter: