SoFi: The BRUTAL TRUTH Behind the Recent Sell-Off

SoFi stock is down more than 50% from its highs. And today I'm going to give you the harsh truth about where this stock is heading next. Will SoFi go bankrupt if we hit a recession? Will SoFi ever get back to $30 with the stock sitting around 15? Is this actually a great opportunity to DCA? Let's look at the latest numbers, the risks, the technicals, and let's find out. Before we get into it, if you enjoy these videos, then don't forget to like and subscribe. This means everything to the channel and lets me know you want to see more videos like this. I'm aiming for 300 likes. Help me hit that goal. Now, let's get straight into it. First of all, SoFi has moved its third quarter earnings report forward to October 27th with the company set to release results around 7:00 a.m. just before the conference call at 8:00 a.m. And this earnings report comes at an interesting time for the US economy. The latest inflation data showed CPI rising 0.4% 4% in August. With inflation running at 3.4% year-over-year, core CPI increased 2.9% over the year. On the jobs front, the US added 162,000 jobs in August while unemployment remained at 4.1%. And importantly, the September jobs report is due tomorrow, followed by the September CPI report on October 14th. So, there's a lot of very important economic data to digest before that October 27th earnings report. If you'd like to see a video where I break down what to expect from that earnings report and where this stock might go next, then drop a comment below. Let me know that this is something that you want to see. So, I was reading this article today and this got me thinking. Why is it that everybody was super bullish on SoFi stock when it was $30 and it seems like everybody is now ultra bearish on the stock at $15. It's been down now for most of the year. There has been plenty of time to DCA the position and every time the stock has hit today's level in 2026, it's been followed by a run of at least 20%. And I'll talk a bit more about that in a moment because there's a few important factors that need to show and I'll show the best plan of action for the stock at this price. One reason now is a great time to buy SoFi Technology stock. This comes at a time when SoFi is trading more than 50% below its 52- week high. As it says here, SoFi's deposit growth in recent years helped power its loan originations, driving higher revenue and profits. The company's personal loan book saw its net charge off rate steadily come down. And even though the financial metrics look good right now, the risk posed by a recession is something investors can never ignore. So think about this for a moment. So business is better than ever in 2026. All we have to do is look at their revenue and EPS. In their most recent quarter, they recorded revenue of 1.2 billion, up 42% year-over-year. net income of 156 million was up 61% year-over-year. Their EPS was up 50%, their net profit margin was up 12.9%. The PE ratio is now just 33. While other stocks trade at multiples of this stocks like AMD is at 150, Palantir is at 160. Even stocks like Broadcom has a PE ratio around 44 while SanDisk and Micron which many investors have said the PE is ridiculously low. Well, their price to earnings ratio is about 23 or 24. This isn't really that much lower than Sofi's. If this was any other company, we would be raging about these kinds of results and this kind of price to earnings. But we're not. And we're not for a couple of simple reasons. At its September meeting, the Fed raised rates by 25 basis points, taking the target range up to 4%. The Fed's latest projections put the median federal funds rate at 4.1% (Nasdaq:sofi stock) at the end of 2026, which means that another 2026 rate hike is possible. And today, Goldman Sachs have stated that they are expecting this to come in December. In fact, Poly Market was recently pricing a 90% chance of another rate hike in 2026, although this has dropped down a bit to 80% today. And according to Reuters, markets are now pricing in at least three more rate hikes before the middle of 2027. That's not even the full year 2027. That's potentially four rate hikes in the next 9 months. That's significant because higher for longer interest rates can put additional pressure on consumers and borrowers, which we know. But this is particularly important for a company like SoFi. And then there's an even bigger concern which is the possibility of a recession. Now Poly Market is currently saying that there is roughly a 9% chance of a US recession by the end of 2026 but a 35% chance of a recession before the end of 2027. So while the 2026 recession probabilities remains low, the substantially higher 2027 figure shows that investors are very concerned about the risks. So, with everything that's going on, it's not surprising that SoFi shares have had a dreadful year. The stock is over 50% off its peak, and this downturn has occurred even though the business has performed well. Now, I will be looking at the charts in just a minute, too, because the stock hit its lowest price of 2026 all the way back in March, while the company itself has performed very well over that time. With SoFi, it's all about growth right now. The most exciting part of SoFi is its impressive growth. Its numbers resemble an earlystage tech company. Net revenue rose by 41% in the last quarter and adjusted net income was up 65%. SoFi's exceptional growth is also demonstrated by its expanding deposit base. The business had 45 billion in total deposits on its balance sheet, more than 1,500% above Q2 2022. In the financial services industry, deposits are a source of competitive strength. They are generally viewed as extremely sticky, though it's also a sign that people trust a particular company with their money. In Sofi's case, deposits have contributed to loan originations by funding lending opportunities. The business had 47.9 billion in total loans outstanding at the end of the second quarter. That's a notable increase from 32 billion 12 months ago. But the flip side of this in this case, however, don't ignore the other side of the same coin. So's deposit growth has fueled loan originations, and the lending book has grown rapidly, introducing greater credit risk. There isn't anything to worry about just yet. Last quarter, personal loans saw a 2% net charge off rate, which was an improvement, and it has trended lower for the past couple of years. But the possibility of a severe recession is always present. Banking entities and their shareholders have to deal with this reality. Any notable downturn, whether it's driven by rising interest rates, a slowdown in AI, or geopolitical turmoil, could negatively impact a company like SoFi. borrowers could start to miss payments leading to sizable losses on the income statement. SoFi's growth is the main reason to buy shares today, but investors need to understand both sides of the story. Now, let's look at the charts because this is where SoFi gets really interesting. As you can see here, the stock is currently trading around 1580 with major support sitting at 1550. What's interesting is that we've seen this exact area tested several times throughout 2026 and on multiple occasions the stock has subsequently rebounded by more than 20%. From roughly 1550 to 1950, for example, that's a move of around 25%. So this 1550 area has clearly been an important level on the chart. The key resistance is around 1920. And we can see here several occasions where the stock has reached that area and been rejected. The RSI is about 50, which is basically neutral. The one negative here is that the short-term moving average structure is still bearish with price sitting below the declining moving average. So technically, 1550 is the level I'm watching most closely. If that support holds, then I'm expecting a move back towards $18 or maybe $19. But here's the harsh truth, and SoFi bulls might not want to hear this. I do think that this is a good opportunity to DCA into SoFi at these levels, especially for investors who believe in the long-term growth story. From a technical perspective, I see the stock moving back towards $18 or $19, but I don't expect a major move beyond that in the near term. I don't see SoFi going back to $30 during 2026. And I wouldn't expect it to get back there in the first half of 2027 either, unless something drastic happens globally. And that might not be what you want to hear if you're holding the stock. But with the risks around interest rates, the economy, and a potential recession, I simply don't think the market is going to give SoFi the kind of explosive valuation expansion that we saw before. Right now, the stock is moving in that $15 to $19 range pretty consistently. And it reminds me a lot of when the stock was in that $5 to$9 range throughout 2023 and 2024. The business continues to grow, but that doesn't necessarily mean the stock is going to surge. So at these levels, I think it's more about being patient, accumulating gradually, buying on the dips, and perhaps locking in some profits around those resistance levels rather than expecting SoFi to suddenly take off again. But don't take this as financial advice cuz I'm not a financial adviser. This is just my opinion. However, if you enjoyed this video, then drop a comment. Give me your opinion on SoFi and the projection for the next 12 months. Don't forget to like and subscribe and I'll catch