Robinhood's business is expanding rapidly, but its stock price remains under pressure. Jim Cramer's recent endorsement highlights a disconnect between the company's financial results and investor sentiment
Robinhood Markets has long divided opinion on Wall Street. While retail investors have embraced the platform for its commission-free trading and accessible interface, many institutional investors remain wary, often citing concerns about risk and business sustainability. The debate intensified after Jim Cramer, host of Mad Money's Lightning Round, publicly sided with the bulls, arguing that Robinhood's platform is well-positioned for continued success.
That optimism comes as Robinhood reported record second-quarter revenue of $1.31 billion, a 32% increase from the prior year, according to its July 29 earnings release. The company also posted net income of $573 million and adjusted EBITDA of $741 million for the quarter. Despite these results, Robinhood's stock (HOOD) is down nearly 18% year-to-date, reflecting a persistent disconnect between business performance and market valuation.
Business Transformation
Robinhood's latest financials reveal a company that has evolved far beyond its meme-stock-era roots. The firm now operates 13 distinct business lines, each generating over $100 million in annualized revenue. Transaction-based revenue climbed 44% year-over-year to $776 million, with options trading contributing $342 million (up 29%), equities revenue nearly doubling to $129 million, and event contracts-Robinhood's prediction market product-soaring to $156 million, more than ten times last year's figure. The company's customer base also expanded, with funded accounts reaching 28.4 million, up 7% from a year ago, and total platform assets rising 32% to $369 billion.
Robinhood Gold, the company's premium subscription service, hit a record 4.8 million subscribers, a 39% increase year-over-year. Average revenue per user rose 24% to $187, and net deposits for the quarter totaled $21.7 billion. Over the trailing 12 months, net deposits reached $75.7 billion, underscoring the platform's growing appeal among retail investors.
Beyond Trading: New Products and Expansion
Robinhood's growth story in 2026 is increasingly about diversification. The Robinhood Gold Card, a credit product, surpassed 1 million customers and $17 billion in annualized purchase volume, generating over $100 million in annualized revenue. Robinhood Banking reported $3 billion in deposits from 240,000 funded customers, while retirement assets under custody jumped 82% year-over-year to $34.5 billion. The margin lending business also expanded sharply, with outstanding balances up 127% to $21.6 billion.
One of the most notable-and controversial-product launches was the Trump Account, which attracted 7 million signups and nearly $1.5 billion in deposits since its July 4 debut. Meanwhile, Robinhood's Agentic Trading feature, introduced in May, allows users to trade equities, options, and crypto through AI-powered agents. Nearly 100,000 customers have opened Agentic Trading accounts, with over $100 million in assets under custody just two months after launch.
International expansion is also underway. Robinhood now counts more than 1 million funded customers outside the U.S., has acquired Canadian digital asset firm WonderFi, and secured a regulatory license in Singapore. The company also launched Robinhood Chain, a permissionless Ethereum Layer 2 blockchain designed for financial services, signaling ambitions beyond traditional brokerage.
Stock Performance and Market Skepticism
Despite these operational gains, Robinhood's stock remains under pressure. Shares are down nearly 18% year-to-date and 12% over the past 12 months, even as the company posts record results. Two main factors appear to be weighing on sentiment. First, crypto-related revenue fell 38% year-over-year to $100 million, a sharp reversal for a segment that once fueled much of Robinhood's growth narrative. Second, operating expenses rose 33%, reflecting higher marketing costs, restructuring charges from a June workforce reduction, and investments in new product launches like the Trump Account and Rothera.
Management's confidence in the company's future is evident in its recent $414 million share repurchase at an average price of about $94 per share. Still, investors remain cautious, waiting to see if new products can deliver sustained growth and whether crypto revenues can stabilize as Robinhood expands into the U.K. and other markets.
Some analysts believe that continued growth in event contracts and Robinhood Gold subscriptions, along with successful international expansion, could help close the gap between business fundamentals and the stock price. For context, a similar disconnect between strong earnings and market skepticism was recently highlighted in the pharmaceutical sector, as seen when Morgan Stanley warned of downside for Bristol Myers Squibb despite robust results.
Robinhood's transformation from a single-product brokerage to a diversified financial platform is well underway. Whether the market will reward that evolution remains an open question, but the company's latest numbers suggest it is not standing still.
For the second quarter of 2026, Robinhood reported $1.31 billion in revenue, a 32% year-over-year increase, and net income of $573 million, up 48% from the prior year. The company's total platform assets reached $369 billion, and funded customer accounts grew to 28.4 million. While options and equities trading drove much of the revenue growth, crypto revenue declined sharply, highlighting the volatility and shifting dynamics within Robinhood's business mix.
Robinhood's rapid product expansion illustrates the risks and rewards of fintech innovation. As the company moves into areas like AI-powered trading, credit cards, and blockchain infrastructure, it faces both regulatory scrutiny and operational complexity. Diversification can help reduce reliance on volatile trading revenue, but it also requires significant investment and exposes the company to new forms of competition and risk. For investors, the challenge is to weigh Robinhood's impressive growth against the uncertainties that come with constant reinvention in a highly regulated industry.
