Ark Invest explains the reason for bottom-fishing HOOD: fluctuations in trading revenue are normal, the real breakout point is the Gold subscription service.

Odaily Planet Daily reports that Cathie Wood’s fund Ark Invest recently made a large-scale buy of Robinhood (HOOD). Ark Invest Research Director Nick Grous posted on X today stating that trading revenue is inherently cyclical and highly influenced by market conditions; focusing solely on this data can cause you to miss the true big changes.

The most important story for Robinhood right now is its subscription service Robinhood Gold, which is a mechanism that continuously pulls users deeper into the Robinhood ecosystem. As of the first quarter of this year, the penetration rate of the Gold service among deposited users has reached 15.8%, and 40% of new users choose to subscribe to Gold directly when registering. In the long term, more and more exclusive Gold services will form a more stable, sustainable, and less market sentiment-dependent revenue base. This is the core story of Robinhood evolving from a single brokerage platform into a “financial super app,” and this flywheel is still in its very early stages.

Earlier reports indicated that Robinhood’s first-quarter earnings, announced last month, fell short of market expectations, with the stock dropping 13% in a single day. However, Ark Invest heavily bought the dip, investing about $39.7 million to purchase over 550k shares of HOOD, which are now included in the flagship funds ARKK, ARKW, and ARKF. Currently, this stock ranks among the top six holdings in these three funds, accounting for about 3%.