SoFi Technologies Surges 2%: Here's Where the Stock Goes Next...

SOFI Stock Analysis

Shares of SoFi Technologies (SOFI)  added more than 2% in trading on Tuesday as the stock battles to hold its December gains.

Shares of the fintech company dropped on Monday following President Biden’s latest announcement of forgiven student debt.

The President announced that “Today, my Administration is approving student loan relief for more than 150,000 borrowers.”  That brought the number of Americans who have had their student debt cancelled by the Biden Administration to more than 5 million.

SoFi's student loan business is significant but represents a small portion of the company’s overall lending activity.

The company focuses its efforts on student loan refinancing rather than new loan origination.  Most of their student loan business comes from refinancing existing loans, and personal loans now make up a much larger part of their total loan book.

SoFi shares saw a huge surge in the fourth quarter of 2024 as the company’s stock rallied from $8 to its highs of $17 in December.  Shares saw the benefit of lower inflation forecasts and improved consumer lending activity.

More recently, the stock has dropped to $14 as inflation fears have been stoked since late-December.  As a result, the expectations for lower interest rates in 2025 have dramatically decreased.

SoFi stock has been battling to remain above two key technical features.

Shares have been threatening to break below their 50-day moving average over the last week.  That trendline is currently situated at $15.35.  A clear move below that trendline would likely increase selling pressure on the stock.

At the same time, shares are trying to remain above the $14 price level.

SoFi stock found resistance at this price in November.  Normally, a stock will find support at price levels that previously provided resistance like SoFi at $14 in November.

From a longer-term perspective, SoFi shares remain in a long-term bull market trend.  The stock has handily outperformed the rest of the banking sector. This suggests that a short-term pullback would open opportunities for investors to buy into the stock’s bullish trend.

Investors should watch for long-term support at $12 and a bullish price target of $20.

SOFI Stock Analysis

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