Cathie Wood’s Ark Invest bought about $39.7 million of Robinhood shares after its earnings miss, signalling confidence that the platform’s crypto-driven slowdown is temporary.
The move followed Robinhood’s weaker first-quarter results on April 28, where softer crypto trading volumes dragged on revenue and triggered a near 12% drop in the stock.
“Preliminary April equity/option trading volumes are tracking toward the highest monthly level this year,”
Said Cantor Fitzgerald, adding the earnings miss was driven more by market conditions than structural issues.
Other analysts, including Compass Point, maintained bullish ratings, arguing the market reaction was “backwards looking” as trading activity rebounds into the second quarter.
However, Keefe, Bruyette & Woods warned that declining transaction fees and weaker crypto volumes could pressure earnings longer term, cutting its price target to $65.
Bullish investors are also focusing on new growth drivers such as Robinhood’s planned prediction markets platform, Rothera, which could diversify revenue beyond trading.
The outlook now hinges on whether strong equity and options volumes can offset crypto weakness, with Robinhood shares still down about 37% year-to-date despite a recent rebound.