Morgan Stanley Analyst Sees Big Upside in Robinhood's Prediction Markets

Morgan Stanley analyst Michael Cyprys has upgraded his rating for Robinhood Markets (HOOD) to Overweight from Equal-weight, citing the company's potential for revenue growth through its prediction markets business. In a report released on September 1, Cyprys set a price target of $150 for HOOD, representing a 43% upside from current levels.

Cyprys' thesis is that Robinhood doesn't need to acquire new customers to grow; it just needs to sell more products to its existing base of 28 million users. The analyst points out that the company's prediction markets business has grown rapidly, with $156 million in revenue generated by fewer than 2 million users in Q2 2026.

This figure is striking compared to the company's crypto trading revenue, which fell 38% year-over-year to $100 million during the same period. In contrast, Robinhood processed over 13.6 billion prediction market contracts in Q2 2026, more than 10 times the volume from the same period a year earlier.

Cyprys raised his earnings-per-share estimates for 2026 through 2028 by 12% to 15%, even while cutting his crypto revenue forecasts. He now projects 23% annual revenue growth, reaching $8 billion by 2028, which is about 6% above the current Wall Street consensus.