Bernstein analysts led by Gautam Chhugani project an approximate 85% upside for Robinhood Markets Inc., raising the price target to $160 and maintaining an Outperform rating. The firm identifies tokenization, prediction markets, and blockchain infrastructure as critical growth engines that extend beyond traditional crypto trading. This outlook comes as the company pivots from a pure trading model toward a broader financial infrastructure platform, leveraging new products like Robinhood Chain and Rothera to offset volatility in digital asset volumes.

Strategic Shift to Infrastructure

The research report highlights that Robinhood’s crypto strategy is evolving significantly. Key growth drivers identified include Robinhood Chain, tokenized equities, Bitstamp, and Robinhood Earn. Since its launch, Robinhood Chain has generated more than $12 billion in decentralized exchange volume and processed over 150 million transactions. Additionally, Robinhood Earn has attracted more than $200 million in deposits. CEO Vlad Tenev noted that these recently launched products support long-term crypto growth, even as trading activity weakened during the second quarter.

Prediction Market Expansion

Robinhood’s prediction market business is emerging as a major revenue contributor. The company’s Rothera exchange processed more than 3.5 billion contracts, including 2.1 billion during Q2. This activity generated around $17 million in quarterly revenue, making Rothera the third-largest exchange of its kind in the U.S., according to Bernstein. Management expects a greater share of prediction market flow to migrate to Rothera over time.

Revenue Dynamics and Outlook

Crypto revenue declined nearly 40% due to weaker industry trading volumes, prompting Bernstein to reduce its 2026 crypto trading revenue estimate by 49%. However, Tenev dismissed concerns about a structural slowdown, arguing that digital assets remain in a long-term growth cycle. The company is diversifying its revenue streams, with the Robinhood Legend trading platform and credit card business each generating more than $100 million in annual revenue. Tenev stated that the company aims to increase U.S. equity ownership from roughly 65% of households to more than 90%, focusing on private-market access, retirement products, and global investing.

What the Numbers Show

The divergence between declining crypto trading revenue and robust engagement in new verticals like prediction markets and tokenization suggests a successful strategic pivot. While traditional crypto revenues fell nearly 40%, the rapid adoption of Rothera (2.1 billion contracts in Q2 alone) and significant volume on Robinhood Chain ($12 billion) indicates that non-trading infrastructure services are becoming material contributors. This shift reduces reliance on volatile spot trading volumes, supporting the analyst view of sustainable long-term growth.

Robinhood Markets Inc. (NASDAQ: HOOD) reported second-quarter earnings per share of $0.62, beating analyst estimates of $0.42 by 47.62%, while revenue rose to $1.31 billion, surpassing the $1.28 billion consensus. The strong financial performance was bolstered by a significant surge in user acquisition, with the company adding nearly 1 million funded customers—its largest quarterly increase in almost five years. Executives attributed this growth partly to the blockbuster initial public offering of Space Exploration Technologies Corp., which drove retail investor interest to the platform.

The user growth momentum translated into robust transaction activity. Transaction-based revenues jumped 44% year-over-year to $776 million, driven by a tenfold increase in event contracts revenue to $156 million and a 95% rise in equities revenue to $129 million. Options revenue also climbed 29% to $342 million. These gains offset a 38% decline in cryptocurrency revenues, which fell to $100 million. Net interest revenues grew 9% year-over-year to $389 million, supported by higher interest-earning assets despite lower short-term rates.

Operational Metrics and User Growth

Funded customers increased by 1.9 million, or 7%, year-over-year to reach 28.4 million. Investment accounts grew by 2.5 million, or 9%, to 29.9 million. Total Platform Assets expanded 32% year-over-year to $369 billion, reflecting continued net deposits and higher equity valuations. Net Deposits for the quarter stood at $21.7 billion, representing an annualized growth rate of 28% relative to Total Platform Assets at the end of Q1 2026.

Subscription services also gained traction, with Robinhood Gold Subscribers increasing by 1.4 million, or 39%, year-over-year to 4.8 million. This contributed to Other Revenues rising 54% year-over-year to $143 million, driven by Trump Account service revenues and increased subscription fees. Consequently, Average Revenue Per User (ARPU) increased 24% year-over-year to $187.

What the Numbers Show

The divergence between transaction revenue growth and cryptocurrency revenue decline indicates a shift in user behavior toward traditional equities and options trading. While crypto revenues fell 38%, the 44% surge in total transaction revenues suggests users are compensating with higher volume in other asset classes. The attribution of the recent user surge to the SpaceX IPO highlights how high-profile market events can drive immediate platform adoption, reinforcing Robinhood’s reliance on retail trading enthusiasm for growth. Additionally, the 39% jump in Gold subscribers demonstrates successful monetization through premium services, diversifying revenue beyond pure transaction volume.

"Whether it’s the Robinhood Chain, Robinhood Ventures, or Trump Accounts, our product velocity is focused on one goal: making everyone an owner," said CEO Vlad Tenev. CFO Shiv Verma noted that the addition of one million funded customers was aided by the SpaceX IPO, strong market backdrop, new products, and the acquisition of WonderFi, which provided a couple hundred thousand accounts.

Following the release of these results, Robinhood stock rose 0.54% to $90.02 in extended trading on Wednesday.