Robinhood’s Strategic Pivot Fuels Analyst Optimism

A flurry of positive analyst commentary and strategic product launches have reignited investor interest in Robinhood Markets as the year draws to a close. The central debate now focuses on whether the company can successfully transform the burgeoning prediction market trend into a sustainable, long-term growth engine.

The stock gained 3.66% on Friday, closing at €103.62. This upward move was catalyzed by a combination of new product features and encouraging assessments from Wall Street firms.

Truist Securities initiated coverage with a "Buy" rating, setting a price target substantially above current trading levels. Their analysis frames Robinhood as evolving beyond its origins as a simple neo-broker into a diversified platform, with prediction markets and event-based wagering becoming key differentiators. The firm highlights this segment as a future driver for both customer engagement and revenue.

Echoing this constructive view, Barclays modestly raised its price target while maintaining an "Overweight" rating. Analysts cited a favorable market environment and Robinhood's potential to capture additional market share in the rapidly expanding event-wagering space.

Operationally, the company's aggressive expansion of its "Yes/No" prediction platform is taking center stage. Following the "Robinhood Presents" event this week, the platform introduced NFL parlay and prop bets. This marks a significant broadening of its prediction products into sports wagering—a segment that has already emerged as the company's fastest-growing revenue line. In the third quarter alone, it contributed approximately $100 million in revenue.

Adding further fuel to the bullish sentiment was news that Cathie Wood's ARK Invest capitalized on the early December pullback to acquire Robinhood shares worth over $30 million. Many market participants interpret this substantial purchase as a strong signal of institutional conviction in the firm's long-term narrative.

Should investors sell immediately? Or is it worth buying Robinhood?

A Stellar Year Amidst Volatility

Despite periodic corrections, Robinhood is poised to conclude 2025 as an exceptionally strong year. In Euro terms, the shares have advanced 169.60% year-to-date and nearly 191% over the past twelve months. This performance has not only significantly outpaced the broader market but has also exceeded the returns of several major AI-focused stocks in recent years.

The company's strategic shift is clearly reflected in its financial results. Third-quarter revenue doubled year-over-year to $1.27 billion, while earnings per share of $0.61 comfortably surpassed estimates. Crucially, Robinhood is no longer solely reliant on transaction-based trading revenue, having successfully cultivated more recurring and diversified income streams. Its prediction markets, initially launched around the 2024 U.S. election cycle, have evolved from a cyclical phenomenon into a stable revenue pillar. After a post-election lull, activity is picking up again with the introduction of sports-related contracts.

The year has not been without its challenges, however. After reaching a 52-week high of €131.88 in October, the stock experienced profit-taking and a decline in trading activity in December. The current price sits roughly 21% below that peak, reflecting both the magnitude of the preceding rally and the stock's inherent volatility. With a 14-day Relative Strength Index (RSI) reading of 76, the shares also remain in technically overbought territory.

Chart Analysis and Forthcoming Catalyst

From a technical perspective, the outlook remains mixed but fundamentally positive. The equity continues to trade well above its 200-day moving average (€84.72), confirming its primary uptrend, though it currently sits about 6% below the 50-day average. The recent rebound from the early December correction demonstrated that buyers are willing to step in on moderate pullbacks.

The next significant test for the stock will arrive with the release of fourth-quarter 2025 results, scheduled for February 11, 2026. This report will provide concrete evidence on whether the new NFL prediction products succeeded in boosting user activity during December and if the prediction market business is indeed delivering the next growth phase that analysts are currently factoring into their models.