Analysts say the financial-services platform is wise to delve deeper into cryptocurrencies because it will increase its clientele.
According to analysts, the introduction of U.S. stock and ETF tokens for clients in the European Union was a wise decision that will broaden the financial-services platform’s reach, and shares of Robinhood Markets Inc. resumed their upward trajectory on Tuesday.
European consumers will get access to over 200 U.S. stock and ETF tokens, as well as private businesses SpaceX and OpenAI, according to Robinhood (HOOD) at a launch event on Monday. Although certain funds, like the publicly traded Destiny Tech100 Inc. DXYZ fund, give investors exposure to these companies, they do not trade on the stock market. The two businesses are also included in the ARK Venture Fund, which is managed by ARK Invest.
Brett Knoblauch, an analyst at Cantor Fitzgerald, believes the move should help Robinhood expand into areas outside of the United States.
“Our main takeaway from the event is that [Robinhood] is getting much deeper into crypto, with new product launches providing meaningful revenue and earnings runway in the future,” he stated. “We remain convinced that [Robinhood] is a must-own name in the sector.”
Following Monday’s 12.8% gain, Robinhood’s stock jumped 5% in early trading. It was on course to close at its 12th record close in the last month as a result.
“Investing in private companies has traditionally been limited to high-net-worth individuals and institutions,” Knoblauch said, referring to the SpaceX and OpenAI stock tokens.
“[Robinhood] will look to democratize access to private capital by utilizing blockchain infrastructure to tokenize shares in private companies,” he stated.
Citing a higher target multiple applied to the company’s shares and its product roadmap, Cantor increased its price target for Robinhood’s stock from $89 to $100 and reaffirmed its overweight rating for the company.
The debut of the stock token, together with the extension of Robinhood’s crypto trading coverage throughout the European Union and the European Economic Area of Iceland, Liechtenstein, and Norway, is expected to double the company’s total addressable market, according to KeyBanc Capital Markets. KeyBanc Capital Markets increased its price objective for Robinhood from $60 to $110 and reaffirmed its overweight rating.
Out of the 24 analysts FactSet polled, 17 have a buy or overweight rating for Robinhood, six have a hold rating, and one has a sell rating.
During the launch event on Monday, Vlad Tenev, the CEO of Robinhood, gave an explanation of the company’s stock tokenization process.
According to him, a consumer in the European Union who wishes to purchase tokenized stock, such as Apple Inc. (AAPL), would send their order to the company’s back end before being forwarded to a broker-dealer located in the United States. Then, from what Tenev called a “TradFi market,” either a market maker or an exchange like the NYSE or the Nasdaq, the broker-dealer would purchase a conventional share.
After that, the share is sent back to the U.S. broker and is kept in custody in the conventional manner. After there, it is routed to what Robinhood refers to as its “tokenization engine.”
According to the Robinhood CEO, one token—which stands for the exposure to the share—is created for each share bought from the TradFi market. After that, the token is sent back to the client.
“When you want to sell these shares, the process goes in reverse,” Tenev stated. The introducing broker is directed by Robinhood to sell the underlying share on the open market. After that, the business burns the token and distributes the earnings to the user.
Although there has been a lot of discussion about Robinhood’s approach, Cantor’s Knoblauch believes that it is doubtful that Robinhood would soon offer stock tokenization to its U.S. customers.
“We see real headwinds to implementation when it comes to tokenized equities and tokenized private equity, as the framework is simply not in place for that to happen yet,” he stated.
After rising 192.5% in 2024, Robinhood’s shares have risen 163.7% just halfway through 2025. This year, the SPX of the S&P 500 index has increased by 5.4%.
