BofA: Agentic Trading Fuels Robinhood's Rise, Not Crypto

The stock price of Robinhood Markets Inc. (NASDAQ:HOOD) has risen about 30% since August 20, with many attributing the increase to the simultaneous rally in the cryptocurrency market.

However, BofA Securities analyst Craig Siegenthaler suggests that the main driver behind Robinhood's rally is actually agentic trading, not cryptocurrencies.

Siegenthaler points out that on September 3, the stock closed at $124.72, a 16.6% increase from the previous day's close. This significant gain came despite barely any movement in Bitcoin (BTC) prices.

The analyst attributes this surge to prediction markets and cluster of analyst notes, but notes that agentic trading is what may continue to lift the stock price. Agentic trading allows customers to connect outside AI models, such as Anthropic's Claude or OpenAI's ChatGPT, to a separate brokerage account where they can research, plan, and place trades.

The Model Context Protocol (MCP), an open standard developed by Anthropic, enables AI models to communicate directly with outside services. BofA estimates that over 4,000 public MCP servers exist, with Robinhood opening its version to Gold subscribers on May 27 and holding $100 million in customer assets linked to these accounts as of the July 29 earnings call.

Interactive Brokers Group Inc. (NASDAQ:IBKR) also offers agentic trading, but requires a human response before an order is executed. Siegenthaler notes that agentic trading adoption will alter the monetization efforts of brokers, increasing trading velocity and margin loan utilization while reducing cash sweep balances.

The analyst estimates that roughly 57% of Schwab's forecasted 2027 revenue comes from its spread on swept cash, which is significantly lower than Robinhood Gold's 3.35% and Interactive Brokers Pro's 3.13% above $10,000. Running early adoption assumptions through 2027 estimates, BofA models show revenue up about 9% at Robinhood and 5% at Interactive Brokers, while down 5% at Schwab.