Robinhood Stock Leaps as Prediction Markets Gain Momentum
Rocketing to a 16.6% increase on Thursday, Robinhood Markets (HOOD) stock soared to $124.72 after Wall Street analysts highlighted its growing prediction-market business and dependence on crypto trading.
The online brokerage's event-contract revenue surged tenfold in the second quarter, reaching $156 million, eclipsing equity transactions ($129 million) and crypto transactions ($100 million). With 13.6 billion contracts traded during the quarter, investors are taking note of Robinhood's potential for growth beyond volatile retail trading.
Investment bank Piper Sandler (PIPR) raised its HOOD price target to $145 from $135, citing support from NFL and college football seasons that could further boost prediction-market activity. Morgan Stanley (MS) also upgraded the stock to Overweight and raised its price target to $150 from $124, seeing potential for diversified revenue streams.
However, regulatory risks persist, with New Jersey seeking U.S. Supreme Court guidance on state authority over sports-related prediction contracts. If states are granted more control, it could impact platforms like Robinhood's Rothera venture with Susquehanna International Group.