Morgan Stanley upgraded Robinhood Markets (NASDAQ: HOOD) to Overweight from Equal-weight on Tuesday, lifting its price target to $150 from $124 and signaling roughly 43% upside from Monday’s close. The stock gained about 1.4% in premarket trading, even as broader crypto-linked equities such as Coinbase and Strategy traded lower. Robinhood shares had risen 21% in August but remained down about 7% since the start of 2026.
Analysts led by Michael Cyprys argued that Robinhood’s broader product capabilities are improving the economics of its installed customer base. The bank raised earnings-per-share estimates for the next three years by 12%, 14% and 15%, respectively, and now expects revenue to grow at a 23% compound annual growth rate through 2028, reaching about $8 billion, roughly 6% above consensus. Morgan Stanley also expects expense discipline to lift EBITDA margins to 53% from 48%.
The report highlighted prediction markets as a major growth driver. Event contract revenue rose to $156 million in the second quarter from $10 million a year earlier, surpassing revenue from equities and cryptocurrency trading. Fewer than 2 million prediction-market users generated that sum, which the bank sees as evidence of further engagement potential. Robinhood is also routing event contracts through its affiliate exchange, Rothera, giving it more control over the value chain.
Morgan Stanley pointed to additional catalysts including retirement accounts, credit cards, advisory services, banking, gold and trust offerings, as well as short selling, futures and desktop trading. Assets per customer increased 23% year over year, while Gold users held about 4.2 times the average customer’s assets under custody. The company now has 13 business lines generating more than $100 million in annualized revenue.
Separately, Robinhood’s decentralized infrastructure showed acceleration at the end of August: Robinhood Chain recorded approximately $874.8 million in volume on August 30, driven by trading in meme assets and decentralized finance. Morgan Stanley sees the proprietary blockchain infrastructure as a potential beneficiary if institutional adoption of DeFi consolidates. The bank’s $150 target is based on a 25-times multiple of its 2031 probability-weighted earnings. Upcoming catalysts include the September 29–30 HOOD Summit, Rothera, perpetual futures and agentic trading.
