Morgan Stanley Upgrades Robinhood Markets (NASDAQ: HOOD) on Expanding Growth Opportunities

• Morgan Stanley upgraded Robinhood Markets (NASDAQ: HOOD) from “Equal Weight” to “Overweight” and raised its price target from $124 to $150.
• Robinhood reported record Q2 2026 net revenue of $1.31 billion, representing 32% year-over-year growth.
• The company’s expanding product portfolio, stronger customer engagement, and growth in prediction markets could reduce its dependence on cryptocurrency trading.

Robinhood Markets (NASDAQ: HOOD) is an online financial services company known for its commission-free trading platform. It allows customers to trade stocks, exchange-traded funds, options, cryptocurrencies, futures, and event contracts. Robinhood also offers retirement accounts, cash management services, credit cards, investment advisory services, and its Robinhood Gold subscription.

On September 1, 2026, Morgan Stanley analyst Michael Cyprys upgraded Robinhood from “Equal Weight” to “Overweight.” The firm also increased its price target to $150 from $124, implying approximately 43% upside from the stock’s previous trading level.

Morgan Stanley cited Robinhood’s expanding product capabilities and improving economics across its existing customer base. The firm believes the company can increase the amount of assets held by each customer while creating additional revenue streams through products such as retirement accounts, banking, credit cards, futures, advisory services, and prediction markets.

Robinhood’s recent financial performance supports the more optimistic outlook. The company reported record second-quarter 2026 net revenue of $1.31 billion, up 32% year over year. Net income increased 48% to $573 million, while diluted earnings per share rose 48% to $0.62.

Transaction-based revenue increased 44% to $776 million. Event-contract revenue rose more than tenfold to $156 million, options revenue increased 29% to $342 million, and equities revenue climbed 95% to $129 million. These gains were partially offset by a 38% decline in cryptocurrency revenue to $100 million.

Net interest revenue increased 9% year over year to $389 million, supported by growth in interest-earning assets. Other revenue rose 54% to $143 million, primarily driven by service revenue associated with Trump Accounts and increased Robinhood Gold subscription revenue.

Customer and asset growth also remained strong. Funded customers increased 7% to 28.4 million, while Robinhood Gold subscribers rose 39% to a record 4.8 million. Total platform assets increased 32% to $369 billion, and quarterly net deposits reached a record $21.7 billion.

Robinhood now operates 13 business lines generating at least $100 million each in annualized revenue. Morgan Stanley believes this diversification could extend the company’s growth trajectory by encouraging customers to use more products and keep a larger share of their financial assets on the platform.

Overall, Morgan Stanley’s upgrade reflects growing confidence in Robinhood’s ability to expand beyond its original trading business. However, investors should continue monitoring the stock’s valuation, cryptocurrency trading activity, regulatory risks surrounding prediction markets, and the sustainability of revenue from newer products.