Robinhood’s trading platform has benefited from investors’ optimism about stocks and crypto.
The company’s sales increased by 65% and earnings rose by 153% in the first nine months of 2025.
The real test of Robinhood’s resilience will come when a bear market emerges.
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Robinhood Markets‘ (NASDAQ: HOOD) app for buying and selling stocks surged in popularity a few years ago as investors became flush with cash from stimulus checks, and the market was on the cusp of beginning its current run.
The company’s impressive product — paired with investors’ appetite for risk over the past few years — has resulted in phenomenal growth for the company and its share price, which is up 1,300% over the past three years. But can Robinhood maintain its momentum over the next few years? Here are a few factors to consider.
Image source: Getty Images.
Research from Vanguard indicates that bull markets tend to last approximately seven years, which is good news for investors, as the current bull market began in 2022. This means that after three years of the S&P 500 marching higher, more good times could still be ahead.
If the current bull market — fueled by artificial intelligence stocks — persists for the average length, Robinhood would likely benefit. The company relies on investors buying and selling stocks (and cryptocurrencies), and the AI boom has been great for business.
The company’s sales were up 65% in the first nine months of 2025 to $3.2 billion, and diluted earnings per share rose 153% to $1.39.
Robinhood has also successfully attracted an expanding base of customers, with the number of funded customers rising 10% to 26.8 million in the most recent quarter. And those investors are lucrative, generating average revenue per user (ARPU) of $191, an increase of 82% from the year-ago quarter.
What’s more, Robinhood has benefited from a rising cryptocurrency market over the past few years and riskier investments through options trading. Robinhood’s transaction-based revenue from options trades increased 50% to $304 million in the third quarter and revenue from crypto investing was up over 300% to $268 million.
If Robinhood can continue to keep its customers engaged on the platform, and the current bull market persists for several more years, the company has a good chance of seeing its share price rise further.
Even if Robinhood has a good chance of continuing its growth trajectory, it’s important to note that Robinhood’s growth relies on investors having an optimistic view of the market.
If there’s a shift in investor sentiment and we enter a bear market, Robinhood’s sales and earnings would likely slow down. The company has attempted to diversify beyond being a trading platform, offering a range of services including savings accounts, credit cards, and estate planning.
But Robinhood hasn’t yet experienced a prolonged downturn in the market, considering that it went public in 2021. Simply put, Robinhood hasn’t weathered a prolonged period of pessimism in the market, and as a company that relies on people buying and selling stocks (and crypto), a bear market could cause some pain in a down market.
Robinhood needs the good times to keep rolling, but there’s lots of conflicting data regarding the current state of the economy. While layoffs in 2025 reached their highest levels in five years, unemployment remains at a relatively low 4.6%. For a while, investors were worried about rising tariffs and their potential impact on inflation, but the worst of those concerns hasn’t yet panned out. Meanwhile, the housing market has stagnated, but consumer spending has remained relatively steady.
If economic data starts to point in a clearly negative direction, Robinhood’s fortunes may change. A slowing economy would likely cause investors to back away from riskier investments, and could cause others to stop buying and selling stocks as frequently as they are right now. But with the economy mostly doing well right now, the broad shift in investor sentiment hasn’t happened yet — and no one knows when it will.
All of which means that Robinhood could be poised for more growth over the next few years. Just keep in mind that if the economic clouds darken further, Robinhood shareholders should expect some volatility.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Where Will Robinhood Be in 3 Years? was originally published by The Motley Fool
