Digital banking firm SoFi Technologies (NASDAQ:SOFI) completed its SPAC merger with Social Capital Hedosophia Corp today, meaning that SoFi — which formerly traded under the ticker symbol ‘IPOE’ — is now officially a public company trading on the Nasdaq under the symbol “SOFI.” Wall Street cheered the news, and sent SOFI stock up more than 10% on the day.
Wall Street is right to be cheering.
SoFi is a fintech company that is building an all-in-one digital wallet which has the potential to turn into the “Amazon of Finance.”
Yep. You heard that right. With the right execution, SoFi could turn into the Amazon of Finance one day. Forget Wells Fargo (NYSE:WFC). Forget Bank of America (NYSE:BAC), and Citigroup (NYSE:BAC). One day, we could all be banking digitally with SoFi.
This company — and the stock — has enormous potential.
That’s I added SoFi stock as a New Buy in exclusive, venture-capital-style research advisory service, Innovation Investor — which is aimed at investing in the world’s most innovative companies, at the epicenter of the world’s most disruptive technology trends, to unlock 2X… 5X… even 10X gains in the stock market.
Since I added SoFi stock to that exclusive portfolio, my subscribers are already up nearly 40%, in just a month as of this writing. To learn more about that top-notch research service, click here.
But, back to SOFI stock, let’s break down exactly why this next-gen tech disruptor is such a great long-term investment opportunity.
SOFI Stock: The First “Hero” Product
SoFi was founded in 2011 by Stanford business school students who realized first-hand that the inefficiencies of the student loan financing industry were due to two things.
One, banking was a physical-first industry, and therefore, was weighed down by lots of property-related expenses that were inevitably passed onto the consumer.
Two, student loans were typically structured as complex transactions with tons of middle-men, all of whom had their own fee that the college student had to pay.
So, SoFi was created, on the idea that the platform could leverage automated technologies and a digitally-native experience to create hyper-convenient access to cheap student loan refinancing.
It worked.
Over the past decade, students across America have flocked to refinance their loans through SoFi to take advantage of their lower rates, which have been achieved through the use of technologies to reduce the operating costs of the business (and SoFi has, of course, passed those cost-savings onto students).
This is what I view as SoFi’s first “hero product” — or the breakthrough product that put SoFi on the map in the fintech world.
But it is what SoFi has done to build on this hero product that excites me about SOFI stock’s potential over the next decade.
Creating the Digital Bank of the Future
SoFi has leveraged its hero product success story to build an ecosystem of high-quality, low-cost, hyper-convenient fintech solutions.
Over the past two years, SoFi has launched a series of digitally-native fintech solutions with significant cost and convenience advantages, through its SoFi mobile and desktop applications. These solutions include:
- SoFi Money: a cash management account that acts like a mobile checking or savings account, with no account fees, 0.25% APY, and an attached debit card.
- SoFi Invest: an attached mobile investing account, where consumers can use their funds from SoFi money to invest in stocks, ETFs, and cryptocurrencies. You can also invest in pre-IPO shares, which are usually reserved for institutional clients.
- SoFi Credit Card: an attached credit card, where consumers can link their Money accounts to this credit card and earn 2% cash-back on all purchases. Those rewards can be used to pay down debt through a SoFi loan, or invest in stocks/cryptos with SoFi Invest. No annual fee.
- SoFi Relay: an attached budgeting software tool, where you can track and monitor spending via SoFi accounts and external linked bank accounts. You can also check your credit score.
- SoFi Education: complementary educational articles and videos that help consumers learn everything about finance – from how to invest in cryptos, to what an APR is, to why credit scores matter.
With the SoFi app, you get all of that… in one application. It’s an all-in-one mobile money app that is leveraging technology to make banking fast, cheap, and easy.
It’s the future. And in that future, SOFI stock may turn into the biggest winner in your portfolio — if you give the stock a chance.
Huge Potential Ahead
Already 1.8 million consumers across America use SoFi. That’s up more than 160% from the beginning of 2019.
But it still represents just 0.4% of the ~500 million bank accounts in the U.S.
Long-term, I think deeply embedded consumer distaste for big banks plus SoFi’s breakthrough technology platform which makes banking cheaper, faster, and easier, will ultimately lead to the SoFi platform turning into America’s “digital bank” one day.
It will replace Wells Fargo. It will replace Bank of America. It will replace JPMorgan Chase. Just like Amazon replaced Walmart, Target, and Nordstrom. Because, at the end of the day, the consumer likes cheap and fast – and technology-first platforms are cheaper and faster than legacy platforms.
Wells Fargo has a $170 billion market cap. Bank of America is worth $345 billion. JPMorgan, $475 billion.
So… from that perspective… SoFi at $20 billion has a long runway ahead of it to technologically transform the antiquated financial services industry.
And that’s why I added SOFI stock to my Innovation Investor portfolio.
Bottom Line on SOFI Stock
SoFi represents one of those unique investment opportunities where you have a next-gen tech disruptor that has a very realistic chance of completely redefining a multi-trillion-dollar industry.
SOFI stock is a potential 10X investment opportunity in the making.
That’s why it’s in the Innovation Investor portfolio. We don’t add stocks to that portfolio unless they represent hyper-innovative companies, or have the potential to change the way we live, or have the opportunity to rise many multiples over the next few years.
SOFI stock checks off all those boxes.
So do the other stocks in that portfolio. And many of them are actually more exciting investment opportunities — with bigger upside potential — than SOFI stock.
To find out more about those potential 10X investment opportunities, click here.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this video.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s the theme of his premiere technology-focused service, Innovation Investor. To see Luke’s entire lineup of innovative next-generation technology stocks, become a subscriber of Innovation Investor today.