Morgan Stanley Upgrades Robinhood to Overweight with $150 Target, Citing 43% Upside Without Reliance on Crypto
Key Takeaways
- •Morgan Stanley upgraded Robinhood to Overweight on September 1, raising its price target from $124 to $150, implying about 43% upside from the $105 Monday close.
- •Robinhood's prediction markets and event contracts revenue reached $156 million in Q2 2026, up from $10 million a year earlier, with fewer than 2 million users participating.
- •Morgan Stanley projects Robinhood EPS growth of 12%, 14%, and 15% over the next three years despite lowered crypto trading volume expectations.
- •Robinhood's roughly 28 million users can access an expanded product lineup including retirement accounts, credit cards, and a derivatives trading platform.
- •Key future checkpoints include prediction markets adoption beyond its current user base, asset-based revenue offsetting softer crypto volumes, and regulatory treatment of event contracts.
Morgan Stanley has delivered Robinhood one of its strongest Wall Street endorsements in months, upgrading the stock to Overweight and setting a $150 price target—remarkably, with cryptocurrency trading volumes playing almost no role in the thesis.
The upgrade, issued on September 1, implies a potential 43% upside from Robinhood's Monday closing price of $105. Analyst Michael J. Cyprys led the call, raising the price target from $124 to $150. The move from Equal Weight to Overweight is a notable shift in stance on a stock whose rally over the past year had been heavily associated with crypto trading enthusiasm; the thesis now rests on a broader revenue base instead.
The non-crypto growth engine
Revenue from prediction markets and event contracts reached $156 million in Q2 2026. The scale of that growth becomes clear when compared with the same category a year earlier, which generated just $10 million—a roughly 15x increase achieved with fewer than 2 million users participating. Prediction markets, where users trade on the outcomes of events such as elections and sports, have become one of the most competitive new categories in retail brokerage, and Robinhood's ability to scale the product across its wider user base is central to the bull case.
Morgan Stanley's earnings-per-share forecasts project EPS growth of 12%, 14%, and 15% over the next three years. Robinhood's user base now stands at around 28 million, and the company has broadened its product lineup to include retirement accounts, credit cards, and a derivatives trading platform. That diversification matters strategically: revenue tied to asset balances and recurring product usage is generally less volatile than transaction-based trading revenue, which fluctuates with market cycles.
Why crypto took a back seat
Morgan Stanley issued its bullish call despite lowered expectations for cryptocurrency trading volumes on the platform. Asset-based revenues, active trader monetization, and the rapid expansion of event contracts are filling the space that crypto trading once occupied.
Prediction markets as the new growth frontier
The standout data point in the upgrade is the prediction markets revenue figure. Climbing from $10 million to $156 million in a single year, with fewer than 2 million users currently engaging with event contracts, points to considerable room for growth across Robinhood's 28-million-user base.
What investors are watching
The shift from Equal Weight to Overweight signals Morgan Stanley's view to its clients that Robinhood should outperform its sector peers over the next 12 to 18 months. In July 2026, Morgan Stanley had previously raised its target for Robinhood to $124 from $95, acknowledging the momentum building around the company's prediction markets business. Going forward, key checkpoints include whether prediction markets engagement continues to expand beyond its current sub-2-million-user base, whether asset-based revenue keeps offsetting softer crypto volumes, and how regulators treat the rapidly growing event contracts business.
