Robinhood’s Prediction Market Had a Record Quarter. Its Stock Is Dropping Anyway After Its Earnings

Robinhood’s stock is falling on Thursday even though the company reported rapid growth in its prediction market area.

The company’s shares are falling 2.67% at 10:53 a.m. ET. They have dropped almost 13% over the past month and about a quarter of their value since the beginning of the year.

Company CEO Vlad Tenev said that the company’s second quarter earnings were powered by strong growth in the mentioned area, which has now become its second-largest trading business. It generated some $156 million in fees, a more than 50% increase compared to the first quarter. The figure was higher than in stock and crypto trading, and only second to options trading.

“We’re looking to scale that rapidly and make it much bigger,” Tenev said. He claimed that the football season and the upcoming midterm elections could provide a boost to prediction bets. It has also lowered commission to gain market share.

The company comes from a significant layoff round in June. Then, it cut about 10% of its full-time workforce, eliminating about 290 positions as the online brokerage says it is moving to streamline operations and flatten its organizational structure despite reporting strong business performance.

The decision, the company said, is designed to maintain a high-performance culture, accelerate product development, and keep the organization lean as it expands beyond its core stock-trading business. Robinhood employed roughly 2,900 full-time workers at the end of 2025. “Robinhood’s business has never been stronger,” Tenev wrote in a memo to employees.

Robinhood emphasized that AI was not the primary factor behind the workforce reduction. It expects to incur approximately $28 million in restructuring-related costs during the second quarter of 2026.

Tenev, however, has addressed the impact of AI in the company’s business. He said earlier this month that AI agents are moving closer to performing the same trading functions as human investors.

Tenev said Robinhood’s vision for “agentic trading” is to make sophisticated automated investing tools available to retail customers, bringing capabilities that have traditionally been reserved for institutional firms into the hands of everyday investors. He said the company’s long-term goal is for AI agents to carry out every trading function that a human trader can perform.

“The idea behind agentic trading is every capability a human can do will be available to an AI agent,” Tenev said during the interview. Drawing on his background in programmatic trading before founding Robinhood, he added that much of today’s institutional trading is already powered by automation and AI, with those technologies largely remaining beyond the reach of individual investors.

Robinhood took a major step in that direction in May when it introduced Agentic Trading, allowing customers to connect third-party AI agents to dedicated brokerage accounts that can analyze portfolios, develop trading strategies and execute stock trades within user-defined limits. The company also launched an Agentic Credit Card, enabling AI agents to make purchases on behalf of customers while operating under built-in spending controls and approval settings, according to Reuters.