Stock Market

Is SOFI Stock a Buy or Sell? Here’s My Call.

What will 2023 look like for California-headquartered neo-banking firm SoFi Technologies (NASDAQ:SOFI)? If you’re counting on a rapid recovery for SoFi Technologies, don’t hold your breath. SOFI stock is a buy but only for a tiny position as lower prices are probably on the horizon. Therefore, it’s wise to wait patiently and refrain from investing too much money all at once.

Becoming a legitimate banking institution is a worthy goal for SoFi Technologies. It’s encouraging to watch SoFi evolve from a personal savings app to a full-fledged lender like the big banks. However, this comes with a host of problems.

It’s fine to take a starter position in SoFi shares as the company is poised to disrupt banking as we know it. On the other hand, any stock position should be closely monitored, and an exit plan is a necessity during these uncertain times.

What’s Happening With SOFI Stock?

SOFI stock’s journey from $15 a year ago to $5 and change has been painful and disappointing. There were occasional price pops along the way, but those were sold off every time.

There does seem to be some buying activity in early 2023, so there’s no need to panic-sell any SoFi Technologies shares you may already own. You can even buy a few shares at the current price, as long as you’re prepared to buy more if/when conditions get worse.

Interestingly, SoFi Technologies’ research found that, despite inflation, “39% of respondents said they want to invest more,” not less. Moreover, Generation Z investors comprised the “biggest group of investors reportedly wanting to invest more despite inflation.”

In light of this, I would propose that SoFi Technologies’ all-in-one financial platform is ideally suited to young, open-minded savers and traders. Eventually, SoFi could upend the traditional, old-fashioned banking system and become a force to reckon with. But first, the company has to survive what could turn out to be a rough year.

Don’t Go Overboard With Your SOFI Stock Investment

If you believe in SoFi Technologies, then you might not be a huge fan of old banks. However, it’s wise to listen to what big-bank executives are saying. And, they’re issuing a strong warning about the financial sector in 2023.

SoFi Technologies finally earned a banking charter, and thereby became a legitimate bank with enhanced lending capabilities, in early 2022. Perhaps this was a dream fulfilled for SoFi’s founders — but at the same time, it may be a case of, “Be careful what you wish for.”

Just listen to what established bank executives are trying to tell investors and consumers. You’ve got Citigroup (NYSE:C) CEO Jane Fraser bracing for a “mild recession” and Bank of America (NYSE:BAC) CEO Brian Moynihan echoing this expectation.

Wells Fargo (NYSE:WFC) CEO Charlie Scharf ominously called 2022 a “turning point in the economic cycle.” Additionally, JPMorgan (NYSE:JPM) CEO Jamie Dimon warned investors about a host of issues, from “geopolitical tensions” and “persistent inflation” to “unprecedented quantitative tightening.”

Let’s not be hasty, then, in celebrating SoFi Technologies’ evolution into a legitimate banking entity. Stay cautious and believe in SoFi’s long-term story while also monitoring for short-term bumps in the proverbial road to riches.

So, Is SOFI Stock a Buy or Sell?

Despite the cautionary tones of big-bank executives, SOFI stock is still a buy in my book. While other banks represent legacy approaches, SoFi Technologies points to the future of modern banking.

However, just because a stock might be a buy doesn’t mean you have to load the boat right now. Accumulating shares of SoFi stock and maintaining an exit plan is sensible. So, feel free to stand by SoFi Technologies but prepare for some macroeconomic hiccups during the coming months.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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