Bernstein analysts give Robinhood an "outperform" rating, citing its S&P 500 inclusion, increasing market share in retail trading, and expansion into tokenized assets.

Executive Summary

Robinhood (HOOD) is set to join the S&P 500 on September 22, marking its transition from a meme stock platform to a diversified financial services provider. Bernstein analysts have given Robinhood an "outperform" rating with a target price of $160, citing its growth in retail trading revenue, expansion into crypto and tokenized assets, and strategic acquisitions.

The Event in Detail

Robinhood Markets will be included in the S&P 500 index, replacing Caesars Entertainment, as part of the index's quarterly rebalancing. Bernstein estimates Robinhood controls 12% of the U.S. retail trading revenue market across equities and crypto, up from 7% two years ago. Robinhood's share of crypto retail trading has surged to around 30% following the collapse of FTX and Binance.US's retreat. The firm projects Robinhood's revenue to grow from $2.9 billion in 2024 to $6.8 billion in 2026.

Market Implications

Inclusion in the S&P 500 is expected to increase visibility and investment in Robinhood, potentially leading to higher trading volumes and greater adoption of its crypto offerings. Robinhood's strategic moves into tokenization and crypto derivatives, particularly in Europe, are also seen as growth drivers. The addition of Robinhood to the S&P 500 increases the index's exposure to the digital asset economy. According to Edwin Mata, co-founder and CEO of tokenization platform Brickken, the index is indirectly capturing part of the sector's growth value and liquidity through Robinhood's role as a retail crypto gateway.

Expert Commentary

"the addition of Robinhood to the S&P 500 shows that crypto-related businesses are now considered strong pillars of America's market." - Agne Linge, head of growth at WeFi

Bernstein analysts believe the crypto bull market could run until 2027, benefiting Robinhood, Coinbase, and Circle. They anticipate bitcoin hitting $150,000–$200,000 within the next year and expect trading volumes to surge into 2026 and peak in 2027.

Broader Context

Robinhood is pivoting to a global financial super-app, integrating blockchain, tokenized assets, and AI-driven wealth management. Its 2025 tokenization of over 200 U.S. stocks/ETFs for European investors enables 24/7 trading and fractional ownership. Strategic acquisitions like Bitstamp for US$200m and WonderFi for US$179m expand Robinhood’s institutional trading capabilities and international footprint. Robinhood operates cryptocurrency trading in 30 European countries. CEO Vladimir Tenev champions Robinhood's expansion into tokenization technology, stating, “We delivered strong business results in Q2 driven by relentless product velocity, and we launched tokenization, which I believe is the biggest innovation our industry has seen in the past decade.” The company launched Robinhood Chain, a blockchain platform for trading tokenized assets. Robinhood's diversified model is expected to deliver a 53% earnings per share (EPS) compound annual growth rate (CAGR) through 2027, supporting its upgraded valuation multiple.