ETFs to Buy as Robinhood Surges on S&P 500 Inclusion

Robinhood HOOD stock jumped more than 15% on Monday on the news that it will soon join the S&P 500, as quoted on Yahoo Finance. The move strengthened Robinhood’s position among the largest publicly traded companies in the United States. Robinhood shares have outperformed the broader industry over the past year. HOOD stock has skyrocketed about 519% over the past year.Strong Earnings PerformanceIn late July, Robinhood Markets, Inc. reported second-quarter 2025 earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.31. This marked a 35.48% earnings surprise and nearly doubled earnings from the same period last year ($0.21).This was not a one-off performance. Over the last four quarters, Robinhood surpassed consensus EPS estimates thrice. Revenues for the second quarter of 2025 came in at $989 million, beating expectations by 7.26% and rising from $682 million a year ago.Its quarterly results were driven by solid trading activity from retail investors, growth in net interest revenues (NIR), product diversification efforts targeting active traders, and vertical integration, which accelerates product innovation. With higher retail participation in the markets, trading revenues are expected to remain strong.Pandemic Boom and Meme-Stock FrenzyRobinhood’s popularity rose during the pandemic as retail trading surged. Between the first and second quarters of 2020, the platform nearly doubled its trading revenues. With lockdowns leaving Americans at home and with more disposable time and efforts for cash generation, Robinhood became the go-to app for retail investors, the above-mentioned Yahoo Finance article pointed out.The frenzy accelerated during the meme-stock rally of 2020–2021. The brokerage also focused on cryptocurrency early, offering bitcoin trading during the crypto rally of the early 2020s, as quoted in the above-mentioned Yahoo Finance article.Ever since Coinbase Global COIN became a part of the S&P 500 index in May 2025, market participants have been anticipating HOOD’s inclusion. COIN shares gained momentum since May. On Aug. 28, Robinhood’s another competitor, Interactive Brokers IBKR, also joined the S&P 500 index. Post joining, IBKR shares saw a surge, though the momentum cooled in September, probably due to profit booking.Inorganic Expansion This Zacks Rank #1 (Strong Buy) company has been engaged in opportunistic acquisitions to deepen its footprint within the United States and globally. In June 2025, Robinhood completed the purchase of global cryptocurrency exchange Bitstamp, strengthening its position in the crypto business. In May 2025, it agreed to acquire WonderFi to solidify its presence in Canada’s crypto market. In February 2025, the company acquired TradePMR, thus foraying into the RIA custody market.In July 2024, it bought Pluto Capital Inc., enhancing its AI-driven advisory and technology capabilities. In 2023, the company expanded into media and credit cards through the acquisitions of Chartr (supporting Sherwood Media) and X1 Inc. (credit card platform). Such strategic buyouts acted as major tailwinds for the company’s growth.What Lies Ahead?Shares of Robinhood have outperformed the industry so far this year, thanks to the crypto market rally. HOOD stock is up about 197% so far this year compared with 11% gain of the S&P 500. The stock comes from a top-ranked industry (top 7% out of approximately 250 Zacks Ranked Industries) and a top-ranked sector (top 13%).The Zacks Consensus Estimate for the company’s 2025 earnings has been revised 1.97% higher to $1.55 per share over the past 30 days. Given the strength of its fundamentals, its S&P 500 inclusion and positive estimate revisions, Robinhood’s impressive price performance is expected to continue in the near term.HOOD is expected to report next on Oct. 29, 2025. Our proprietary Earnings ESP (Expected Surprise Prediction) for HOOD is as high as +44.00%. A Zacks Rank #1 and a positive ESP indicates that the stock currently has the right combination to beat estimates. However, the indicator does not conclusively predict another beat in the next release.ETFs in FocusAgainst this backdrop, investors can tap HOOD-heavy exchange-traded funds (ETFs) like T-Rex 2X Long HOOD Daily Target ETF ROBN, YieldMax Dorsey Wright Hybrid 5 Income ETF FIVY, SMART Trend 25 ETF STRN, ARK Fintech Innovation ETF ARKF and YieldMax Crypto Industry & Tech Portfolio Option Income ETF LFGY.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report ARK Fintech Innovation ETF (ARKF): ETF Research Reports Coinbase Global, Inc. (COIN): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks