Morgan Stanley analyst highlights Robinhood’s revenue growth potential through prediction markets

Robinhood’s prediction markets business just did something its crypto trading desk couldn’t: grow fast enough to make a Morgan Stanley analyst genuinely excited. Analyst Michael Cyprys upgraded Robinhood Markets (HOOD) from Equal-weight to Overweight on September 1, slapping a $150 price target on the stock, up from $124. That implies roughly 43% upside from current levels. The thesis is straightforward: Robinhood doesn’t need more customers to grow. It needs to sell more products to the 28 million customers it already has. The numbers behind the upgrade Robinhood pulled in $156 million in prediction market revenue during Q2 2026. That figure was generated by fewer than 2 million users, a fraction of its total base. For context, crypto trading brought in $100 million during the same period, a 38% decline year-over-year. Equity trading revenue landed at $129 million. The volume numbers are equally striking. Robinhood processed over 13.6 billion prediction market contracts in Q2 2026, more than 10 times the volume from the same period a year earlier. CEO Vlad Tenev has called prediction markets the fastest-growing segment in the company’s history. Cyprys raised his earnings-per-share...