HOOD dropped 10%+ on crypto panic, then ripped 14% in a single session. With Q4 earnings Tuesday and Wolfe slapping a $125 target on it, the question everyone's asking: was this the buy of the year?
The Selloff
Robinhood Markets (NASDAQ: HOOD) got absolutely hammered in early February 2026. The culprit? A broader crypto market crash that dragged the stock from the mid-$90s down to lows around $85 on February 3, with continued pressure pushing it to $82–84 by February 6–8.
The math is simple: Robinhood derives a material chunk of high-margin revenue from crypto trading (~25%+ of recent growth). When Bitcoin tanks, HOOD tanks harder. On some days (like February 5), the stock dropped 10%+ in a single session.
Add to that: fears of "crypto winter" returning, trading cycle peaking, competition in perps/prediction markets, and multiple compression from 2025's massive run-up (+200% for the year).
The Snapback
But here's where it gets interesting.
Crypto volatility is a double-edged sword — yes, crashes hurt sentiment, but volatility itself drives trading volume. And volume is what pays Robinhood's bills.
By late last week, the recovery signals started flashing:
- Friday after-hours pushed toward $88
- Crypto stabilized (for now)
- Today (February 9): HOOD surged ~14%, pushing back into the mid-to-high $90s
From the $85 low to today's close, early dip-buyers are sitting on 15–20% gains in less than a week.
The Wolfe Upgrade
Adding fuel to the fire: Wolfe Research dropped a fresh upgrade today with a $125 price target — roughly 50% upside from the recent lows.
Their thesis? Robinhood's diversification efforts are paying off. This isn't just a "crypto brokerage" anymore.
Prediction Markets: The Standout Growth Driver
Robinhood's event contracts (branded as prediction markets) have become a frequent topic in discussions — and for good reason:
- Users trade on real-world outcomes: Sports (Super Bowl ads for the February 8 event), politics, economics (Nasdaq-100 levels for 2026), tech ("Best AI this week"), and niche categories like weather/insurance hedging
- Volume has hit billions in contracts monthly — positioned as a "supercycle" beyond traditional trading
- Offset to crypto slowdowns: In dip discussions, it's highlighted as a positive hedge, though not yet fully compensating for crypto weakness
Long-term, prediction markets are seen as democratizing risk/insights and becoming a core pillar for retail portfolios.
UK ISA Launch: International Expansion
Robinhood just launched its UK Stocks & Shares ISA, rolling out this week:
- Commission-free investing in stocks and shares
- 2% cashback on new eligible contributions funded before April 5, 2026 (major incentive)
- Quick setup via app/website with ISA transfers supported
- Aimed at broadening international footprint — UK/Europe expansion including tokenized stocks and 24/7 trading plans
This is a big deal. International revenue has been a missing piece of the Robinhood story, and the UK ISA opens a significant new market.
The Full Diversification Picture
The bears keep calling HOOD a "gambling app," but the numbers tell a different story:
- 11+ revenue lines over $100M each
- Gold subscriptions: 4M+ subscribers (exceeding 2M was the old target)
- High-yield options collateral: Interest on cash used as options collateral (big for options sellers)
- AI tools: Robinhood Cortex — portfolio-aware assistant
- Prediction markets: Billions in monthly contract volume
- UK ISA: Fresh international expansion
This isn't your 2021 Robinhood anymore.
What X Is Saying
The February 3 dip sparked heated debate across FinTwit. @amitisinvesting captured the mood at the bottom:
"HOOD underperforming despite benefiting from high-beta trading... the reaction seems unjustified."
He called Robinhood a "generational company" under Vlad Tenev, citing product innovation beyond pure trading. He hedged earlier but bought some of the dip.
The bull case in the replies:
- "Loading up" — prediction markets offset crypto weakness
- Long-term value in gambling, tokenization, 24/7 trading
- Selloff overdone vs. Coinbase (COIN fell less severely)
The bear case:
- "It's a gambling app" with overvaluation risk
- Competition from Hyperliquid (faster growth, better margins in perps)
- IBKR and Schwab entering zero-fee crypto
The Core Argument: Short-Term Fragility vs. Long-Term Strength
The bear case (last week's view):
- Heavy crypto exposure made HOOD vulnerable to the February crash
- Volumes dropped, fears of crypto winter returning
- Trading cycle potentially peaking
- Multiple compression after 2025's +200% run
The bull case (current):
- Volatility ultimately drives volumes (HOOD rose on February 6 with crypto swings)
- Diversification (11+ revenue lines, Gold, prediction markets) reduces pure trading dependency
- UK ISA adds international momentum
- Earnings Monday could validate strong underlying metrics, flipping sentiment
Earnings Monday: What to Expect
HOOD reports Q4 and full-year 2025 earnings on Monday, February 10, 2026 after market close (AMC), with the conference call at 5:00 PM EST.
Consensus Expectations:
| Metric | Estimate | YoY Growth |
|---|---|---|
| Revenue | ~$1.34B | +31.7% |
| Adjusted EPS | $0.62–0.68 | — |
| Transaction Revenue | ~$810M | +20.5% |
Key metrics to watch:
- Transaction-based revenues driven by options and equities (offsetting any crypto weakness)
- Funded customers growth
- Overall trading volumes
The track record: Robinhood has a history of beating estimates with strong surprises in recent quarters. Analysts remain generally optimistic, with recent upgrades citing diversification and growth potential.
A beat-and-raise could send this thing parabolic. A miss (especially on forward guidance) could erase the week's gains. Volatility is likely given crypto exposure and market conditions.
The Verdict: Was It a Gift?
Hindsight says yes. The $85 low looks like a classic buy-the-panic moment. The crypto-driven selloff appeared overdone, especially compared to peers like Coinbase.
Looking forward? The risk/reward still looks compelling if you believe in Robinhood's evolution beyond a pure trading app. The $125–133 price targets imply 30–40% upside from current levels.
The rebound (including today's 14% pop and the $125 target) suggests the dip was more panic than fundamental shift. Long-term bulls see Robinhood evolving into a full-spectrum fintech giant; shorts see crypto/competition risks.
Ahead of earnings, it's high-conviction but volatile — classic HOOD.
Positions: None. This is analysis, not financial advice.
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