SoFi Stock Plunges: Buy the Dip?

SoFi's stock has recently experienced a substantial decline, shedding over 20% from its previous highs and entering bear market territory. While part of this drop is collateral damage from the broader tech and AI stock selloff, company-specific factors have also contributed. Mixed signals from Federal Reserve officials regarding potential interest rate cuts have pressured growth-oriented companies like SoFi, impacting its student loan refinancing business.

Furthermore, the recent cryptocurrency crash has also played a role in SoFi's stock performance, especially as the company recently relaunched its cryptocurrency trading services. As a high-beta stock, SoFi's price action tends to be more volatile than the overall market. The stock's fall below its 100-day moving average is a bearish technical indicator, although its rich valuations also made it vulnerable to market pullbacks.

Despite the recent volatility, the selloff has pushed SoFi's risk-reward profile to an attractive point. At current price levels, SoFi's valuations are considered reasonable, particularly when factoring in the company's growth potential. This makes the stock a compelling buy for investors who have been bullish on SoFi's long-term prospects.