Bernstein sees 87% upside for Robinhood as prediction markets surge, says 'crypto jitters' are temporary

Robinhood (Nasdaq: HOOD) shares fell Tuesday after the company reported a year-over-year drop in fourth-quarter crypto revenue, though analysts at research and brokerage firm Bernstein said the weakness reflects temporary “crypto jitters,” reiterating their $160 price target.

The stock dropped approximately 9% in after-hours trading before stabilizing, according to The Block’s HOOD price price page. HOOD was trading at $85.60 as of the Tuesday close, recovering some ground from an intraday low of $78.80 but still down 24% year-to-date.

The market reaction followed a divergence between record total platform revenue that Robinhood posted and a 38% year-over-year decline in cryptocurrency transaction revenue, which fell to $221 million. This slowdown in the crypto segment occurred despite total net revenue rising 27% to a record $1.28 billion for the quarter, supported by growth in options and equities trading. 

Notably, the dwindling crypto-related income reflects a 52% year-over-year drop in trading volumes on the core Robinhood app, as the platform shifts its reliance away from retail-driven trading spikes toward diversified subscription and interest-based income streams.

Bernstein frames crypto weakness as temporary

In a note to clients on Wednesday, the Bernstein analysts led by Gautam Chhugani said the top-line weakness driven by lower crypto activity was “expected” and that the firm sees “no point in turning negative on the stock closer to the bottom.”

Bernstein said that several business metrics “remained solid” in Q4 despite the “crypto jitters.” Funded accounts, Gold subscribers, and Gold cardholders all reached new highs, while retirement assets grew to $26.5 billion, approximately double the prior-year level, according to the note. Robinhood Banking, rolled out in late 2025, has attracted more than 25,000 funded customers contributing over $400 million in balances. 

The analysts highlighted that Robinhood’s prediction markets reached new records, accounting for roughly 14% of transaction-based revenue and 8% of total revenue. The platform traded 8.5 billion contracts in Q4, well above prior expectations, and early 2026 volumes already total $4 billion, versus a $27 billion 2026 forecast, per the note. 

Chhugani also pointed to the scheduled mid-2026 launch of Rothera, a prediction market joint venture with Susquehanna, as a key driver for the firm's transition into a broader information and capital markets ecosystem.

Looking ahead, the analysts said Robinhood plans to prioritize family investing, private markets, and tokenization. The company launched the public testnet for Robinhood Chain, an Ethereum Layer 2 blockchain built on Arbitrum, on Tuesday and said it will support experimentation with tokenized assets ahead of a mainnet launch later this year.

The analysts maintained their outperform rating and $160 price target for HOOD, representing 87% upside from the Tuesday close. Bernstein identified $60 to $75 as an accumulation range, a level it said reflects bear case scenarios outlined in a research note published last week.

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