Woofun AI reports that Bernstein has upgraded its price target for Robinhood Markets (HOOD) to $160 from $130, maintaining an outperform rating as the broker pivots toward prediction markets and away from pure cryptocurrency trading.

The valuation adjustment reflects Bernstein’s projection that emerging financial instruments, including prediction contracts, perpetual futures, and tokenized stocks, could collectively surpass a $70 billion market size. Robinhood is positioned as a primary beneficiary of this expansion, with the new $160 target representing a 23% increase from the previous estimate.

A critical inflection point is projected for the second quarter of 2025, when revenue from prediction markets is expected to exceed income generated by cryptocurrency trading. This milestone signifies a fundamental shift in the company’s revenue composition, moving away from historical dependence on crypto market activity toward a more diversified income structure.

Per Woofun AI, the growth is driven by retail investor interest in trading contracts based on elections, sports results, and economic indicators. Bernstein characterizes the current subdued conditions in the broader cryptocurrency sector as cyclical rather than structural, noting that the outlook does not account for a potential rebound in Bitcoin prices, which would imply further upside.

The firm expects the stock to outperform the overall market over the next 12 to 18 months, citing the development of recurring revenue streams that are less volatile than traditional crypto trading fees. This financial metric underscores the stability gained through diversification into non-crypto asset classes.

This strategic pivot validates Robinhood’s business transformation beyond its reputation as a crypto-trading platform. If prediction market revenue indeed surpasses crypto revenue in Q2, it will confirm that the current crypto weakness is a temporary cycle rather than a permanent decline, solidifying the shift toward emerging asset classes.