Robinhood just got a fat bump on Wall Street, thanks to a $200 million push from prediction markets. Piper Sandler has officially raised its price target for the stock to $140, up from $120, giving it a 12% upside.
Analyst Patrick Moley made it clear in a new note to clients that these so-called event contracts could be a serious goldmine: “Prediction markets present significant upside opportunity for Robinhood.”
One of the key players here is Kalshi, a prediction platform feeding its sports contracts straight into Robinhood. Kalshi is seeing record monthly activity in September, helped by NFL and NCAA markets, a move that’s lining both companies’ pockets.
They’ve got a 50-50 revenue-sharing deal in place, with each side collecting a 2-cent fee per contract. The cash is already flowing.
Regulators block Kalshi’s sports betting in some states
But not every state is playing nice. Over the past few months, some U.S. regulators have ordered Kalshi to shut down sports betting activity, accusing the company of breaking gaming laws. This could hit Robinhood, too, since they’re tied together in this contract-sharing deal. Kalshi’s response? Lawyer up and fight it.
Even with that mess, Piper Sandler isn’t backing down from its bullish stance. They’re not alone either. According to LSEG, out of 23 analysts tracking Robinhood, two-thirds rate it as a buy or strong buy. Investors clearly still believe the stock has room to run.
It’s already running. On Tuesday, shares edged up 2%. Year-to-date? Up over 200%. Not bad for a stock that got ripped to pieces during the meme-stock mess of 2021.
Robinhood targets private markets with new fund
That comeback is turning into a full-blown transformation. In its latest investor letter, Columbia Threadneedle Global Technology Growth Strategy praised Robinhood for showing off a “new product cadence.”
In other words, they keep releasing new stuff, from options trading to crypto, and that’s paying off. The stock has gained 448.48% in the past 12 months, closing at $124.89 on September 22, with a market cap of nearly $111 billion.
The next move? Venture capital for the average Joe. Robinhood Ventures Fund I is here. It’s designed to give retail users a shot at owning slices of private startups. Chief executive Vlad Tenev wants to break into private markets, where everyday investors are usually locked out.
But let’s be real. The word “speculative” shows up 28 times in the fund’s filing. The investments (in at least five unnamed startups) could be illiquid, hard to value, and likely to swing all over the place. Some deals might even involve debt. If it hits, Robinhood wins big. If it flops, the blame game begins, even if investors were warned.
As a fund manager, Robinhood is no longer just a middleman, as it’s picking the bets too. If those bets go right, it boosts their side businesses — like robo-advisors, credit cards, and wealth management. But if it screws up? It risks trust. That’s risky for a firm still recovering from the backlash when it shut down GameStop and AMC trades in 2021, which led to lawsuits, hearings, and an SEC probe.
Still, regulators seem to be chilling out. The SEC just loosened rules around closed-end funds investing in private equity. Trump wants to scrap mandatory quarterly reporting. Everyone’s easing off, while Robinhood is riding that wave, and hoping their customers keep pressing “Buy.”
