Bernstein sees 87% upside for Robinhood amid prediction market growth

Bernstein analysts said Robinhood’s recent decline in crypto revenue is only a temporary setback, and that the company still holds substantial upside potential. They reaffirmed a $160 price target – an 87% upside from Tuesday’s close. According to their note, the 38% drop in crypto revenue and the 24% slide in HOOD shares year-to-date already reflect a “worst-case scenario” and do not alter the long-term outlook.

Following its earnings release, HOOD shares briefly fell nearly 9%, though they quickly recovered part of the loss. The market reacted cautiously to a steep drop in crypto trading activity: transaction volume in the app fell 52% year-over-year, and crypto-generated revenue dropped to $221 million. Even so, Robinhood posted record quarterly revenue of $1.28 billion, up 27%, driven by strong performance in options and equities.

Bernstein emphasized that the broker’s core metrics remain robust. Fully funded accounts, Robinhood Gold subscribers, and Gold Card holders all hit new highs, while retirement assets doubled year-over-year to $26.5 billion. The new Robinhood Banking product onboarded more than 25,000 clients and exceeded $400 million in deposits.

A major growth engine has been the rapid rise of prediction markets, which accounted for roughly 14% of transaction-based revenue and 8% of total revenue in the quarter. Robinhood processed 8.5 billion contracts in Q4 – far above expectations. In just the first weeks of 2026, volume reached $4 billion, compared with full-year forecasts of $27 billion. Analysts also highlighted Rothera – a joint venture between Robinhood and Susquehanna – set to launch in mid-2026 and strengthen Robinhood’s position across information and capital markets.

Another catalyst is the launch of the public testnet for Robinhood Chain, the company’s Arbitrum-based L2 network. Bernstein sees infrastructure for asset tokenization as a strategic pillar for Robinhood in 2026, one that could reduce its reliance on the more volatile crypto segment.

The analysts argue that investors are overlooking the structural changes underway inside the platform. While softer crypto activity appears cyclical, growth in prediction markets, banking products, and the company’s L2 network is shaping a long-term expansion story that, in their view, “is only just beginning.”