Bernstein raised its price target on Robinhood (HOOD) to $160 from $130 on Monday, while maintaining its Outperform rating, and betting that the broker is well positioned to benefit from a generational shift in how retail investors trade.
The new target rests on a thesis that broker-dealers, incumbent exchanges, prediction platforms, and crypto-native venues will spend the next two years fighting over a fee pool worth more than $70 billion across prediction markets, perpetual futures, tokenized equities, and emerging compute-linked contracts, analysts led by Gautam Chhugani wrote in a note shared with The Block.
The clearest near-term catalyst analysts cited is prediction markets, now large enough to rival crypto as a revenue line.
Bernstein expects Robinhood to grow prediction market revenue at a 64% compound annual rate through 2028, reaching $1.7 billion.
The Robinhood-linked Rothera exchange, a CFTC-licensed venue launched in late May, has processed more than 3.5 billion contracts since going live, with FIFA World Cup markets accounting for roughly 93% of that volume, according to the note.
Rothera has become the fourth-largest prediction venue by volume within a month of launch, Bernstein said, accounting for about 16% of Robinhood's total event-contract volumes, while the rest routes to Kalshi.
The firm sees the second quarter of 2026 as potentially the first in which prediction markets surpass crypto as a revenue line for Robinhood.
Bernstein models roughly $150 million in prediction market revenue for the quarter, up from about $104 million in the first quarter, while crypto trading volumes decline roughly 38% quarter over quarter.
Bernstein lowered its 2026 crypto trading revenue estimate by 49%, citing softer-than-expected industry volumes in the first half of the year.
The cut pulled the firm's 2026 total revenue estimate down 10% to $5.3 billion, with adjusted EBITDA falling 19% to $2.8 billion and earnings per share dropping to $2.05 from a prior $2.65, the note said.
Analysts also frame crypto weakness as cyclical rather than structural, treating any bitcoin (BTC) price inflection as upside not built into their model.
One of Bernstein's core arguments is that Robinhood's edge across every new asset class is distribution.
New trading products commoditize quickly, making customer access the binding constraint, and Robinhood can launch across 27 million funded accounts and 14 million monthly active users at near-zero acquisition cost, the analysts wrote.
The firm modeled prediction markets, perpetual futures, and Robinhood Chain, contributing 18% of total revenue in 2027 and 23% in 2028, up from about 3% in 2025.
Robinhood Chain, the company's Arbitrum-based Layer 2 that went live July 1, recently crossed $400 million in total value locked and is tracking annualized decentralized exchange volumes of roughly $200 billion and about $50 million in annualized chain fees, as detailed in The Block's earlier coverage of the chain's launch.
Bernstein kept its 35x one-year forward earnings multiple, rolling its valuation horizon to 2028 and targeting $4.56 in earnings per share, 39% ahead of consensus.
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