Prediction market revenue may surpass crypto business for the first time! Robinhood (HOOD.US) undergoes “epoch-making” platform transformation, multiple investment banks give “Buy” ratings

According to Zhitong Finance APP, investment banks Bernstein and Piper Sandler analysts stated this week that trading platform Robinhood (HOOD.US) may see revenue from the prediction market surpass crypto trading revenue as early as the second quarter.

Bernstein analyst Gautam Chhugani wrote in a client note on Monday that the three months ending in June may mark the first quarter “where revenue from the prediction market exceeds that from crypto.” Chhugani, who maintains an “Outperform” rating on the stock, raised Robinhood's price target from $130 to a Wall Street-high of $160, reflecting the new market opportunity.

Additionally, Piper Sandler analyst Patrick Moley indicated that his forecasting model echoes a similar view, projecting that prediction market revenue will surpass crypto revenue in the second quarter and throughout the remainder of this year.

In recent months, analysts have highlighted the shift of exchanges such as Robinhood, Coinbase, and Gemini Space Station Inc. towards prediction markets, concurrent with a decline in crypto trading activity. The decrease in crypto trading comes as bitcoin extends its losses to levels not seen since early 2024. Meanwhile, the FIFA World Cup became a major catalyst, inspiring investor interest in prediction markets.

Bernstein’s Chhugani stated that now that the World Cup is over, “a modest market reversal is to be expected,” however, the market may be “missing a generational platform transformation in trading markets.” He predicts that as Robinhood expands its collaboration with Rothera, its prediction market revenue will grow to $1.7 billion by 2028, representing a 64% increase from 2026. Rothera is one of the newest players in the prediction market and started accepting bets in May. The Rothera startup is a joint venture between Robinhood and Susquehanna International Group, with its previous owner Miami International Holdings Inc. retaining a minor stake.

The model constructed by Bernstein analysts shows that new asset classes, including the prediction market, perpetual contracts, and Robinhood Chain, will contribute 18% of the company’s projected revenue in 2027 and 23% in 2028, respectively.

Needham analyst John Todaro on Tuesday raised Robinhood's price target from $97 to $123 and issued a “Buy” rating. The analyst noted that the company continues to show strength across nearly all metrics, with the latest monthly data indicating accelerated growth in stocks, options, and event contracts, as well as a rebound in crypto activity.

Data shows that Robinhood is scheduled to release its second-quarter results on July 29, and analysts expect the company’s adjusted profit to grow about 4% year-on-year, with revenue surging by 28%.