Robinhood stock to double despite crypto slump, says Morgan Stanley

Morgan Stanley expects Robinhood’s shares to astir treble successful worth arsenic the fintech leverages the existent crypto chaos to instrumentality marketplace shares from rivals.

That’s according to the concern bank’s latest enactment to investors, successful which it argues that portion the trading platform’s banal terms dropped astir 30% implicit the past week, it is “well positioned” to payment from its lasting successful the market.

“We spot caller events arsenic an accidental for HOOD to seizure crypto marketplace stock from competitors fixed its established marque and regulatory compliance that could instil greater capitalist assurance arsenic investors are progressively focused connected the information and information of crypto,” Morgan Stanley analysts Michael J. Cyprys, Annalei E Davis, and Barron Thomas wrote.

Robinhood’s crypto capabilities alongside its innovative flair, and quality to resonate with 150 cardinal customers, predominantly from millennials, volition spot its stock terms surge from $49.90 to $90 by this clip adjacent year, Morgan Stanley wrote. The analysts’ bull lawsuit was that the terms volition deed $120.

Morgan Stanley’s caller estimates travel arsenic crypto has been rocked by a clang that has shaved astir 10%, oregon astir $300 billion, of its full marketplace worth this week.

Donald Trump’s menace to present caller tariffs, the $1.5 cardinal Bybit hack, and a smattering of scandals person each been identified arsenic potential triggers for the fall.

Crypto business

Crypto stakeholders person cautioned that determination whitethorn beryllium much symptom successful the short-term, but look convinced that the bull tally is not over.

But adjacent if it is, Morgan Stanley said it didn’t expect the pullback to beryllium arsenic atrocious arsenic anterior ones acknowledgment to a much crypto-friendly administration, and that Robinhood volition travel retired amended than galore of its rivals.

Crypto has played a cardinal relation successful Robinhood’s offerings since 2018. “We tin beryllium a large player,” Johann Kerbrat, the trading app’s crypto boss, told DL News successful January.

Robinhood’s crypto services contributed to a 58% leap successful Robinhood’s nett full gross of $2.9 cardinal successful 2024. Crypto besides helped the brokerage grounds nett income of $1.4 billion.

Robinhood’s marketplace stock of crypto stood astatine 0.75% successful Jan 2025, little than fractional its anterior highest of 1.8% successful Aug 2021, according to Morgan Stanley.

The trading app is not conscionable squaring up to manufacture autochthonal firms similar Coinbase, but is besides competing against fintechs similar neobank Revolut, trading app eToro, and payments elephantine PayPal.

Andrew Flanagan is simply a Markets Correspondent for DL News. Have a tip? Reach retired to [email protected].