What Happened?
Shares of financial services company Robinhood (NASDAQ:HOOD) jumped 2.8% in the afternoon session after Bank of America raised its price target on the stock and the company's CEO made bullish comments on the future of finance.
The investment bank increased its price target to $157 from $139 while keeping a Buy rating on the shares, expressing a positive long-term view. This move came as Robinhood’s CEO, Vlad Tenev, called the tokenization of assets a “freight train” that would reshape the financial system. Tokenization involves linking real-world assets, such as stocks, to blockchains to make them more accessible for trading. Supporting this vision, Robinhood recently launched tokenized U.S. stocks in Europe. This positive news followed the company's addition to the S&P 500 index during the previous month, which also helped its performance.
After the initial pop the shares cooled down to $144.06, up 3.6% from previous close.
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What Is The Market Telling Us
Robinhood’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 9% as the stock hit a new all-time high of $132 amid a confluence of positive catalysts, including robust business growth and multiple analyst price target upgrades.
The momentum is supported by strong fundamental performance, with the company’s crypto revenues surging 98% to $160 million in the last quarter and its user base expanding with 2.3 million new funded accounts. This performance follows Robinhood's recent inclusion in the S&P 500 index on September 22, a move that increases institutional credibility. Wall Street has also taken notice, with several analysts raising their price targets. For instance, Piper Sandler increased its target to $140, BofA Securities to $139, and Mizuho to $145, signaling growing confidence in the company's strategies.
Also contributing to the move is the improved momentum in the crypto space fueled by positive regulatory commentary and signs of increasing institutional interest. The overall market value of cryptocurrencies rose by 2.5% to $3.86 trillion, with major digital assets like Bitcoin reclaiming the $112,000 level and Ethereum climbing 2.8%.
Further supporting the positive mood, SEC Commissioner Hester Peirce noted that the U.S. is entering a more constructive era for digital assets. The move was also supported by a broader economic environment, as the U.S. Federal Reserve resumed its rate-cut cycle, a development generally seen as positive for risk assets like crypto.
Robinhood is up 265% since the beginning of the year, and at $144.06 per share, has set a new 52-week high. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $4,138.
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