Robinhood's crypto and AI drive could bring 'Schwab elite banking' to everyone, Bernstein says

Robinhood announced three new financial products on Wednesday evening, aiming to offer more sophisticated wealth management, investment and private banking services to the tech-forward younger generation, leveraging crypto and AI.

More specifically, Robinhood Strategies seeks to provide low-cost, personalized investment advice with real-time insights. Robinhood Cortex is an AI research assistant offering market data and trading tips. Finally, Robinhood Private Banking lets users open accounts, earn 4% APY on savings and access concierge services. The products are available to Robinhood's Gold members — which now top 3.2 million users after almost doubling in 2024, analysts at Bernstein said in a Thursday note to clients.

The popular brokerage platform aims to "capitalize on the impending $114 trillion great wealth transfer, set to occur over the next few decades as wealth passes to younger generations," Chhugani wrote — hoping to significantly boost its assets under custody.

Crypto tokenization is a key factor in Robinhood's plan to use disruptive technologies to make higher-end private banking and wealth services, typically reserved for high-net-worth individuals, available to its target demographic at a more accessible cost, the analysts said, describing it as "Schwab elite banking" but for everyone.

Robinhood CEO Vlad Tenev has also recently advocated for greater tokenization, seeing it as a means to "unleash the true power of the crypto revolution" by enabling real-world assets, such as equities and private investments, to be brought onto blockchain technology, alongside an expansion of its existing crypto services.

AI technology will also help improve accessibility to higher-quality research, wealth advisory and trading assistance at a lower cost, Chhugani noted, assisted by Robinhood's recent acquisitions as the industry heads toward "one-stop-shop" multi-asset and multi-service platforms.

Bernstein doubles Robinhood price target after crypto-led record $1 billion Q4 revenue

In February, the Bernstein analysts more than doubled their price target for Robinhood stock to $105 following its first $1 billion revenue quarter in Q4, bolstered by the news that the Securities and Exchange Commission had also concluded its investigation into the firm's crypto arm without pursuing any enforcement action. Robinhood's crypto services led those record revenue figures with 487% quarter-over-quarter growth — 733% year-over-year.

Bernstein rates Robinhood stock as outperform, with its recently upgraded price target based on a 33x multiple on its earnings per share by the end of 2026. The analysts estimate 35% EPS growth by the end of 2025 and 47% by the end of 2026 — significantly above consensus.

The analysts argue market consensus is still missing Robinhood’s business model shifts and revenue pool expansion as the firm seeks to build a global financial ecosystem across asset classes, including equities, crypto, tokenized securities, stablecoins and prediction markets — leveraging blockchain rails to drive operating efficiency.

Robinhood stock closed up 1.1% at $44.73 on Wednesday and is currently up around 1.5% in early trading on Thursday, having gained more than 120% during the past year, according to The Block's Robinhood price page.

HOOD/USD price chart. Image: The Block/TradingView.

Chhugani maintains long positions in various cryptocurrencies. Certain affiliates of Bernstein act as market makers or liquidity providers in the equities securities of Robinhood.