Robinhood Stock Jumps on a Catalyst That Isn't Stock Trading

Robinhood just got a fresh vote of confidence from Wall Street, and it has nothing to do with stock trading. Piper Sandler raised its price target on Robinhood to $145 from $135 this week, citing a business most retail investors haven't fully priced in yet: prediction markets.

Shares of Robinhood surged as much as 15.7% this week on the news, trading volume running well above its full-day average by mid-morning. The rally puts Robinhood among the best-performing names in the S&P 500 this session, driven almost entirely by optimism around a product line that didn't exist at scale a year ago.

The thesis centers on Rothera, a prediction-markets joint venture between Robinhood and derivatives firm Susquehanna that launched in June. Rothera just secured Commodity Futures Trading Commission approval to offer football contracts covering game outcomes and point spreads — timing that lines up perfectly with the start of NFL and college football season, according to CNBC's coverage of the Piper Sandler note.

Piper Sandler analyst Patrick Moley pointed to World Cup activity earlier this summer as the leading indicator here: average monthly prediction-market volume at Robinhood grew 88% between June and August compared to the prior five months. If football drives even a fraction of that kind of engagement, the revenue impact could be substantial.

"The NFL/[NCAA Football] season should be a significant catalyst for HOOD's 3Q26 and 4Q26 prediction market revenue." — Patrick Moley, Analyst, Piper Sandler

Piper Sandler's model gets specific: the firm projects roughly 29.7 billion event contracts traded on Robinhood's platform between September and December, translating to about $320 million in revenue for that stretch, or roughly $960 million annualized. Moley also noted that Robinhood has been steadily pulling volume away from rival Kalshi, with its share of Kalshi's total trading dropping from a 22%-30% range last football season down to the mid-single digits — a sign users are migrating to Rothera directly rather than routing through Kalshi's platform.

Comparisons to last year's football season matter here because Kalshi's own numbers set the baseline. Football accounted for 42% of Kalshi's total trading volume during the 2025 season, generating roughly $14 billion in NFL and college football volume on that platform alone. Piper Sandler doesn't expect football to dominate Kalshi's mix quite as heavily this time, since major sports made up just 54% of Kalshi's volume in August versus 83% back in November — but that diversification cuts the other way for Robinhood, since a smaller slice of a bigger prediction-market pie can still mean serious dollars if the Rothera platform keeps gaining share.

Piper Sandler wasn't the only analyst turning more bullish. Scotiabank initiated coverage on Robinhood this week with a Sector Outperform rating and a $136 price target, according to TipRanks, adding another name to the growing list of firms betting on the company's non-brokerage growth engines. TipRanks data shows the broader analyst consensus at Strong Buy, with an average price target implying roughly 17.5% upside from current levels.

For investors weighing an entry, the appeal here is diversification away from Robinhood's legacy business of commission-free stock and options trading, which faces margin pressure as competitors match its pricing. Prediction markets carry a different revenue profile entirely, tied to sports calendars and event-driven volume spikes rather than daily trading activity.

Robinhood's broader business has been humming too, which makes the prediction-market story additive rather than a replacement thesis. Third-quarter trading volumes across equities and crypto have stayed elevated, and management has continued expanding into new product lines like tokenized assets through its Robinhood Chain initiative, giving the stock more than one lever for growth heading into year-end.

The risk sits in regulation and seasonality. Prediction markets remain a relatively new product category under active scrutiny, and CFTC approval for one contract type doesn't guarantee smooth sailing for future expansions. Volume is also inherently lumpy — tied to specific sporting events — which could make quarter-to-quarter revenue from this segment choppier than investors are used to seeing from Robinhood's core business.

Investors watching the name should keep an eye on Robinhood's next earnings call for actual prediction-market revenue figures against Piper Sandler's $320 million estimate — that print will tell you quickly whether this catalyst is real or overhyped.

Bottom line: Robinhood's stock move this week wasn't about trading commissions — it was about football season becoming a legitimate new revenue driver, and Wall Street is starting to price that in.