Morgan Stanley upgrades Robinhood’s rating, noting that the monetization potential of its existing users is being underestimated by the market.

Morgan Stanley has upgraded Robinhood’s rating from "Hold" to "Overweight" and raised its price target from $124 to $150, implying an approximate 43% upside from Monday’s closing price. Analysts noted that the market has increasingly recognized Robinhood’s accelerated new product launches and expansion of its potential market size, though the monetization capability of its existing user base remains undervalued. Morgan Stanley pointed out that Robinhood’s roughly 28 million users form an important growth foundation, and its new businesses like prediction markets are boosting per-user asset size, trading activity, and monetization efficiency. Among these, prediction markets have fewer than 2 million users, yet contributed $156 million in revenue in the second quarter and drove users to adopt other products. Analysts also believe that Robinhood’s derivatives trading platform and clearing house Rothera will further expand its distribution advantages and bring opportunities for infrastructure and third-party revenue.