Morgan Stanley Upgrades HOOD, Cites Prediction Market Boom for $150 Target

Morgan Stanley upgraded Robinhood Markets Inc. to Overweight from Equal-weight, raising its price target to $150 from $124. Analyst Michael Cyprys cited a prediction market boom as the reason for the upgrade, expecting roughly 43% upside from Monday's close. Robinhood generated $156 million in prediction market revenue in Q2, driven by over 13.6 billion event contracts traded.

This represents more than 10 times the figure from the previous year and 20 times the July 2025 level. CFO Shiv Verma noted that nearly 2 million customers had used the product. The upgrade comes amid a weakening outlook for Robinhood's crypto business. CFO Verma also highlighted that prediction market customers are more likely to hold a Robinhood retirement account.

Morgan Stanley now expects revenue growth of 23% a year to $8 billion by 2028, slightly above consensus. Robinhood traditionally sourced contracts from third-party exchanges, but launched an affiliated exchange, Rothera, in June to route prediction-market trades. The Ninth Circuit ruled on sports event contracts, potentially allowing Robinhood to apply Nevada's gaming laws to the product.

The upgrade suggests Wall Street's growing acceptance of prediction markets as a core earnings engine for Robinhood.