Robinhood's Next Growth Engine: Prediction Markets Take Center Stage
A new analysis from Bernstein, the Wall Street research firm, paints a detailed picture of Robinhood's potential growth path. The report highlights a significant shift: by 2028, the platform's prediction markets business is projected to become a larger revenue contributor than its core cryptocurrency trading arm.
From Niche to Mainstream Revenue Driver
Bernstein analysts forecast explosive growth for Robinhood's prediction markets. The segment is expected to generate approximately $650 million in revenue this year, a figure set to surge to $1.7 billion by 2028. This would account for nearly 20% of the company's projected total revenue of $9.4 billion that year.
In contrast, the firm's cryptocurrency business is expected to bring in $1.6 billion in 2028. The projection signals a pivotal evolution, where a newer product line overtakes the trading activity that initially fueled Robinhood's popularity.
Revised Estimates and Steady Confidence
Citing more optimistic assumptions for equity and crypto trading revenue, Bernstein raised its overall revenue estimates for Robinhood for the years 2026 through 2028 by 3% to 4%. Despite this upgrade, the firm maintained its $160 per share price target, underscoring a consistent long-term view.
For the upcoming quarterly results, analysts are also bullish. They anticipate third-quarter revenue could rise about 13% sequentially to around $1.5 billion, driven by higher trading volumes in stocks, options, and a recovery in crypto activity.
Market Context and Forward Look
Ahead of the report's release, Robinhood shares traded at $93.60 in pre-market activity. The stock has declined more than 29% over the past twelve months. This analysis reframes the investment narrative, suggesting Robinhood's future may be less tethered to crypto market cycles.
The rise of prediction markets points to a future where investor focus may shift to how Robinhood monetizes its large user base through innovative products like event contracts. This diversification could be key to building a more resilient and sustainable growth model.