Shares of Robinhood (NASDAQ: HOOD) saw an uptick on Monday after Bernstein’s Gautam Chhugani increased his price target on the stock — a move fueled partly by Robinhood’s aggressive expansion into the prediction market. Chhugani, maintaining an “outperform” rating, revised the stock price forecast to $160 from $130, signaling a potential 60% increase based on last week’s closing numbers.
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Prediction Markets as Growth Drivers
Chhugani isn’t shy about Robinhood’s trajectory. Still, he predicts a 64% annual growth rate for the company’s prediction market segment, which could swell to $1.7 billion in revenue by 2028. Robinhood has positioned itself well in the changing market of prediction markets, perpetual futures, and tokenized equities. The upcoming quarterly report on July 29 might be the first to show prediction market revenue surpassing its cryptocurrency earnings — a notable milestone if it materializes. “This growth engine isn’t sputtering,” said Chhugani, highlighting that Robinhood’s event contracts might soon become its top-performing sector.
World Cup Impact and Rothera’s Role
Robinhood’s recent gains weren’t isolated. But the World Cup, a major event in sports betting, played into its hands, with Robinhood reporting a major uptick in trades routed through Rothera, an entity it co-invested in with Susquehanna International Group. Since May, Rothera has processed $3 billion in World Cup event contracts, marking its impressive entry into the market. The company’s connections to Susquehanna are paying off, enabling Rothera to undercut rivals on fees while maintaining narrow spreads. Market watchers have noted that Rothera handled over 3.5 billion event contracts since its inception, with the World Cup taking the lion’s share at 93%.
Future Growth Opportunities
Rothera holds just 16% of Robinhood’s prediction market volume — a figure poised to grow, potentially driving future revenues. This niche appeal is attractive to retail investors who are keen to tap into rapidly expanding prediction markets but lack publicly traded options to do so. Robinhood, well-known among retail investors, provides one of the few gateways into this burgeoning sector. “Robinhood isn’t just resting on its laurels,” Chhugani detailed, pointing out the company’s ongoing efforts to deepen its footprint in prediction markets.
Looking Ahead
The imminent quarterly results on July 29 will shed light on Robinhood’s prediction market performance, particularly in relation to its cryptocurrency earnings. Investors are keenly watching these developments, anticipating that Robinhood may continue using its market position to fuel future growth.
Eri Gaitu leads the news desk at Best in Slot, tracking breaking developments across the gambling world in real time. From exclusive bonus offers and casino launches to licensing updates and regulatory shifts, Eri ensures readers are always first to know about the changes that matter to their gaming experience.
