Bernstein SocGen Group has significantly increased its price target for Robinhood Markets (NASDAQ: HOOD) to $160 from $130, maintaining an “Outperform” rating on the stock. This upward revision, issued on Monday, July 20, 2026, by analyst Gautam Chhugani, underscores a critical shift in revenue expectations for the brokerage giant, with prediction markets now a key driver.
The investment firm now anticipates that revenue generated from Robinhood’s burgeoning prediction markets will surpass its crypto trading income for the first time in the second quarter of 2026. This projection signals a notable pivot in the platform’s growth drivers, moving beyond its traditional cryptocurrency offerings.
Prediction Markets Drive Robinhood’s Valuation Increase
The clearest near-term catalyst for Robinhood, according to Bernstein, lies in its rapidly expanding prediction markets. These offerings are now poised to rival, and even exceed, the revenue historically derived from crypto trading activities on the platform.
Bernstein models approximately $150 million in Q2 2026 prediction market revenue, an increase from $104 million in Q1. The firm forecasts a 64% compound annual growth rate (CAGR) for prediction market revenue through 2028, potentially reaching $1.7 billion.
This growth in prediction markets is expected to counteract a projected 38% quarter-over-quarter decline in crypto trading volumes for Q2 2026. Such a shift redefines the primary revenue drivers for the platform.
Rothera Exchange Powers Prediction Market Growth
A key factor underpinning Bernstein’s optimistic forecast is the performance of the Rothera exchange. This CFTC-licensed prediction market venue, launched in late May 2026, has quickly become a significant player.
Rothera has processed over 3.5 billion contracts since its inception, with about 93% of that volume attributable to FIFA World Cup-related markets. This rapid adoption propelled it to become the fourth-largest prediction market platform by volume within a month.
The exchange now accounts for about 16% of Robinhood’s total event-contract volumes, with the remaining volume routed to Kalshi. This indicates a multifaceted strategy in the evolving prediction market landscape.
Robinhood’s Strategic Distribution Advantage
Bernstein emphasizes Robinhood’s inherent competitive strength in distributing new asset classes. Analyst Gautam Chhugani’s report highlighted the company’s “distribution as the moat.”
New trading products often commoditize quickly, making customer access the primary constraint for success. Robinhood’s established user base gives it a notable advantage in launching new offerings.
The research argues that Robinhood can effectively introduce these new products to its existing customer base. This approach minimizes acquisition costs for new ventures like prediction markets and other digital assets.
Broader Digital Asset Expansion and Financial Outlook
Beyond prediction markets, Bernstein’s updated target considers Robinhood’s broader expansion into new digital asset categories. These include perpetual futures, tokenized equities, and emerging compute-linked contracts.
These new asset classes are projected to contribute significantly to Robinhood’s overall revenue. They’re expected to account for 18% of total revenue in 2027 and 23% in 2028, a substantial rise from around 3% in 2025.
Robinhood Chain, the company’s Arbitrum-based Layer 2 blockchain launched on July 1, is another strategic component. It has already accumulated over $400 million in total value locked (TVL).
The chain is tracking annualized decentralized exchange (DEX) volumes of approximately $200 billion, generating about $50 million in annualized chain fees. This further diversifies Robinhood’s revenue streams.
Revised Financial Projections and Long-Term Confidence
Despite strong prospects in new areas, Bernstein revised its 2026 crypto trading revenue estimate down by 49%. This adjustment reflects softer-than-expected industry volumes during the first half of the year.
Consequently, the firm’s 2026 total revenue estimate for Robinhood now stands at $5.3 billion, a 10% reduction. Adjusted EBITDA is projected to decrease by 19% to $2.8 billion, with earnings per share (EPS) dropping to $2.05 from a prior $2.65.
However, analysts view this crypto weakness as cyclical rather than structural. They suggest that any upward movement in Bitcoin’s price could provide additional upside not currently factored into their models.
Bernstein forecasts Robinhood’s 2028 EPS at $4.56, which is 39% ahead of consensus estimates. This long-term outlook is based on a 35x one-year forward price-to-earnings (P/E) multiple, reflecting confidence in the company’s future growth potential.
Robinhood is slated to report its second-quarter earnings on July 29. The market will be closely watching how these emerging revenue streams perform against the backdrop of fluctuating crypto volumes. The Q2 results will offer initial insights into whether prediction markets are indeed reshaping the brokerage’s financial trajectory.