Shares of sports betting giant DraftKings skyrocketed over 11% on Tuesday, marking its largest single-day percentage gain in more than three-and-a-half years, after the company disclosed preliminary operating metrics showing explosive growth in its prediction markets platform.
According to an SEC filing, annualized consumer trading volume on DraftKings Predictions hit $1.3 billion in May, a 24% increase from April. Total annualized trading volume surged 34% month-over-month to $3.1 billion. The figures, though preliminary, signal robust user adoption as the company gears up for major events like the 2026 FIFA World Cup.
The rally comes amidst fierce competition from dedicated prediction market operators such as Kalshi and Polymarket. Kalshi alone reported $10.4 billion in sports trading volume in May, dwarfing DraftKings' numbers. However, DraftKings leverages its extensive sports-betting customer base and access to large states like Texas and California where traditional sports betting remains illegal.
Wall Street analysts reacted positively. TD Cowen reiterated a Buy rating with a $30 price target, calling prediction markets “a large, early-stage opportunity.” UBS raised its price target to $49, while JPMorgan trimmed slightly to $31 but maintained an Overweight rating. Institutional investors also increased stakes, with Capital World Investors boosting its position by 181.4% in Q4.
From a technical standpoint, DKNG now trades above its 20, 50, and 100-day moving averages, though the 200-day moving average remains a resistance level. The Relative Strength Index sits at 51.23, indicating neutral momentum. Analysts identify key support at $23.50 and resistance at $32.
Despite the positive signal, DraftKings' most recent quarterly earnings showed earnings per share of $0.20, missing estimates by $0.02, while revenue of $1.65 billion beat slightly. The company’s ability to convert prediction market activity into sustainable revenue will be closely watched as the space matures.
