StoneX Sees Huge Upside in Robinhood as Blockchain Business Takes Off

StoneX Financial has initiated coverage of Robinhood Markets (NASDAQ:HOOD) with a Buy rating and a $170 price objective, implying about 45% upside from Tuesday's close of $117.34.

The call came from Mark Palmer, managing director and senior research analyst at StoneX, who argued that Robinhood's operating trends are speeding up across almost every key measure.

Second-quarter net revenue increased 32% year over year to $1.31 billion, but crypto-related revenue dropped 38% and now represents just 8% of net revenue, down from 16% a year earlier.

Rather than viewing this shift as a setback, Palmer sees it as evidence that Robinhood is no longer defined mainly by digital asset trading.

The core of the bull case is Robinhood's move beyond commission-free retail brokerage into exchange platforms and blockchain infrastructure that can earn software-like margins.

One key area of growth is Robinhood Chain, the company's Ethereum Layer 2 network, which launched on mainnet on July 1 and has already exceeded gas-fee collections of other Ethereum Layer 2 networks combined.

Daily fees were about $4.59 million by September 3, and annualized revenue was near $39 million as of August 29, according to StoneX's model, which projects that the chain could generate $980 million in revenue by fiscal 2029 at an 85% margin.