Robinhood shares are heading for a brutal weekly loss as the once-red-hot trades in bitcoin and AI stocks that powered its growth lose momentum.
Shares of the trading platform slid 10.1% on Thursday, extending a sharp decline that has pushed the stock down 13.3% for the week. The slump has erased more than 27% of Robinhood’s value so far in November, a dramatic pullback after a strong run earlier this year. The stock is slightly higher in premarket trading Friday.
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The latest slide reflects a sharp reversal in the risk-hungry investment activity Robinhood relies on. The company’s core business is closely tied to retail investors pouring into speculative corners of the market, particularly cryptocurrency and buzzy artificial intelligence stocks stocks.
Those trades helped fuel a resurgence in Robinhood revenue and user engagement earlier this year as bitcoin hit fresh highs and anything tied to artificial intelligence soared. But the recent rout in crypto and high-growth tech stock leaders is exposing Robinhood’s sensitivity to sentiment swings.
Bitcoin has fallen about 12% this week alone, hitting a fresh low of $80,548.09 on Friday, the lowest level since April. Shares of AI enabler Nvidia are down 5% this week.
This post was originally published on CNBC Markets
