Big Money Bets Robinhood’s Crypto Slump is Just a Temporary Speed Bump

Markets

What to know:

Despite a nearly 12% stock price decrease following its recent disappointing earnings report, some major investors and Wall Street analysts aren’t overly concerned about Robinhood (HOOD).

On April 28th, the trading platform reported first-quarter earnings and revenue that were lower than expected, largely because fewer people were trading cryptocurrencies. Investors reacted negatively to the news, but Cathie Wood’s Ark Invest viewed it as a buying opportunity, purchasing approximately $39.7 million worth of the company’s stock the following day, demonstrating their belief in its long-term potential. Robinhood is a significant investment for Ark Invest, representing about 3% of their portfolios and ranking as a top holding across all three of their funds.

The unexpected shift appears to have happened as Wall Street analysts reassured investors that the recent disappointing results were just a temporary setback. Data from early April suggests the company is starting to gain traction. Trading activity in stocks and options is also picking up, potentially offsetting the continued weakness in cryptocurrency markets.

Cantor Fitzgerald continues to recommend buying the stock, maintaining its $110 price target, and believes recent trading indicates a potential turnaround. The firm noted that early data for April shows equity and option trading volumes are on track to be the highest they’ve been all year. They also attribute the company’s recent disappointing earnings more to broader market factors than to any problems with the business itself.

Compass Point agreed, keeping a ‘Buy’ rating on the stock but slightly reducing its price prediction to $107. They believe the market is focusing too much on past performance, considering the company is expected to have a strong second quarter.

Although experts at both firms are optimistic about Robinhood’s future, some analysts warn of potential risks, especially with cryptocurrency trading. Lower trading activity and falling prices in the crypto market are likely to continue impacting Robinhood’s performance for now.

As a crypto investor, I’m keeping a close eye on recent developments with this stock. KBW, who already thought it was fairly valued, just lowered their price target again – they now predict it’ll only reach $65, down from $75. Their analysts are worried that lower transaction fees could stick around for a while, which would really impact the stock’s potential.

From my perspective as an analyst, we’re seeing a concerning trend: capture rates are down across the board. Both crypto and options trading haven’t shown the expected intake, and this has continued into the second quarter. Because of this, we’ve had to revise our long-term earnings forecasts downwards, extending those adjustments through 2028.

Despite recent worries, one leading analyst remains optimistic. Analysts at Bernstein kept their ‘Outperform’ rating and $130 price target for the cryptocurrency, noting that prices haven’t fallen further in April and that trading in stocks and options is still healthy. This suggests crypto activity might be starting to level off.

Moreover, beyond trading, bullish investors are now turning their attention to new revenue streams.

From my analysis, prediction markets are really gaining traction right now. We’re seeing growth, particularly in contracts tied to specific events, and companies are anticipating boosts from things like product launches and major global happenings. I’m especially watching Robinhood’s new platform, Rothera – it could be a significant source of revenue and improved profitability for them down the line.

As a researcher following Robinhood, I’m currently watching to see if the recent increase in trading activity will hold up. If it does, I believe Robinhood could see a return to growth faster than anticipated. However, if trading slows down again, we can expect continued pressure on their revenue from transactions, potentially lasting through the rest of the year.

The stock increased roughly 3% on Thursday, however, it has decreased by about 37% overall this year. Coinbase (COIN), a similar company, also saw a 3% increase on Thursday, but is down around 19% year-to-date.

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2026-04-30 22:31