Wall Street Splits Over Robinhood After Tom Lee's Bearish Call

Tom Lee of Fundstrat, a strategist typically associated with bullish crypto calls, recommended investors avoid Robinhood heading into the rest of 2026 -- a position that immediately drew pushback when it came up for debate on CNBC's Investment Committee. Panelists called the call "counterintuitive" given how closely Robinhood's stock has historically tracked the crypto market Lee usually champions.

The disagreement centers on how to weigh Robinhood's growth against its price tag. Second-quarter revenue rose 32% year over year to a record $1.31 billion, earnings per share climbed 48%, and net deposits hit a record $22 billion. But the stock isn't cheap by any measure: Robinhood trades at a forward non-GAAP P/E of 38.33 versus a sector median of 11.34, a 238% premium, and a GAAP P/E of 46.23 against a 12.05 sector median. Bulls point to diversification away from crypto as the offset -- crypto made up just 12.88% of transaction revenue last quarter, down sharply from a 53% peak in the fourth quarter of 2024 -- while Robinhood Gold subscribers, the company's paid tier, grew about 39% year over year. New pushes into private-market access funds and prediction markets add further, less crypto-dependent revenue lines.

For investors, this is a valuation debate more than a growth debate -- nobody disputes Robinhood's numbers are strong, the argument is whether they justify a triple-digit premium to peers. Bulls like Capital Wealth Planning's Kevin Simpson argue the next generation of investors is embedded in Robinhood's ecosystem and that subscription revenue, unlike trading fees, is recurring and less volatile. Bears note that returns have been muted over the past year despite the growth, and that a crypto downturn could still hit the stock harder than the improving revenue mix suggests. Investors already holding Robinhood should track the crypto share of transaction revenue as the clearest signal of whether the diversification story is real, and weigh that against the stock's rich multiple before adding to a position.