Robinhood's shares edged higher on Monday following Bernstein's decision to increase its 12-month price target to $160 from $130, maintaining an Outperform rating. The firm highlighted Robinhood's moves into prediction markets, tokenized equities, perpetual futures, and AI-driven trading as catalysts for growth beyond traditional stock and crypto offerings.

Stock Performance and Analyst Outlook

During Monday’s session, Robinhood Markets (HOOD) traded between $98.61 and $102.60, closing at $100.49, up 0.53% after a premarket gain exceeding 2%. Bernstein analyst Gautam Chhugani emphasized that Robinhood is expanding into higher-growth trading products, projecting a 2028 earnings per share of $4.56, which surpasses consensus estimates. The valuation assumes a 35-times forward earnings multiple supported by sustained revenue and earnings growth through 2028.

Shifts in Revenue Streams and Prediction Markets Growth

Bernstein anticipates that prediction markets could surpass crypto trading as a revenue source for Robinhood as early as Q2, forecasting $150 million in prediction market revenue for that quarter. This projection contrasts with a 49% reduction in 2026 crypto trading revenue estimates, reflecting ongoing cyclical pressures in the crypto sector. Robinhood’s Rothera exchange, active since late May, has processed over 3.5 billion contracts, with World Cup-related markets accounting for approximately 93% of volume.

The analyst firm described the relationship between Robinhood and Kalshi as competitive yet cooperative. Robinhood continues to distribute Kalshi contracts while also offering its own event contracts via Rothera, which represents around 16% of the company’s total event-contract volume.

Introduction of AI-Powered Trading Agents

Robinhood recently launched Agentic Trading, enabling third-party AI agents to autonomously research markets, construct portfolios, and execute trades on its brokerage platform. This service uses Robinhood’s Model Context Protocol and is currently available at no cost for U.S. equities and options customers, with crypto support planned for the future. The AI agents can access portfolio details, buying power, and transaction history, with users able to approve or automate trades.

Robinhood is set to report its Q2 earnings on July 29, with Wall Street consensus expecting $0.55 earnings per share and $1.27 billion in revenue. Investors will be closely monitoring if growth in prediction markets can compensate for the weakening crypto trading segment.

This material is for informational purposes only and does not constitute financial advice.