Robinhood’s revenue doubled in the third quarter, and its stock price has surged over the past few years.
However, Robinhood is highly dependent on active trading markets, especially for riskier options and cryptocurrencies.
If a bear market occurs in 2026, it’s unclear how Robinhood will maintain its momentum.
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Robin Hood (NASDAQ:HOOD) The company’s shares are set to soar in 2025 as it expands its user base and enhances its trading platform with additional services. The result has been an impressive share price increase of over 200% in the last year.
However, despite the platform’s popularity and the company’s strong performance, there are still some reasons to doubt Robinhood can sustain this momentum in 2026. Here’s why investors shouldn’t buy Robinhood in 2026, along with some potential warning signs for current shareholders.
Image source: Getty Images.
Robinhood’s impressive gains are partly the result of legitimate growth. The company’s third-quarter revenue doubled to $1.3 billion, and non-GAAP (adjusted) earnings grew 259% to $0.61 per share. Robinhood’s average revenue per user also increased 82% to $191.
The growth was driven in part by more customers flocking to Robinhood, with total users reaching 26.8 million in the quarter, up 10% from the same period last year.
Yet despite these impressive results, it’s worth noting that much of Robinhood’s rapid growth can be attributed to the booming stock market. this S&P 500 Index It has grown by an astonishing 75% in the past three years. Many cryptocurrencies are also performing well, BitcoinThe value increased by more than 400%.
Robinhood generates the majority of its revenue from trading, with cryptocurrency investing and options trading being two important parts of the company. Both areas are inherently risky areas of the market, leaving Robinhood vulnerable if the good times end quickly.
All of this is relevant to Robinhood’s stock price, as the company’s growth is closely tied to market performance. Robinhood went public in 2021, and investors have since experienced a surge in stock and cryptocurrency prices. Considering Robinhood hasn’t weathered the bear market yet, investors currently betting on the skyrocketing stock are investing in a company with an unproven track record during troubled times.
I understand why some investors might want to hold on to their Robinhood shares right now. After all, the company’s revenue and profits are growing, and it’s adding new users.
I think the stock can be held longer as long as the company continues to improve. However, I would also caution everyone that if the U.S. economy begins to slow down, Robinhood’s stock price could drop significantly.
We’ve already seen some signs that this is happening, with the unemployment rate rising to 4.6% in November and layoffs in October reaching the highest level in 22 years for that month. There were some job gains in November, which brings some mixed signals about the economy, but the overall picture is that Robinhood investors should pay close attention to any major economic changes.
Eventually, the bull market we have experienced over the past few years will come to an end. If the economy slows down significantly or enters a recession, investors may withdraw from some riskier investments, including cryptocurrencies. A sharp decline in the market could cause Robinhood’s stock price to drop. Considering many young investors have yet to experience a bear market, a sharp drop could cause them to quickly sell their stocks to avoid losses.
All of which means Robinhood investors would be better off getting their rewards sooner rather than waiting for the stock to move higher in 2026. If a bear market is coming, Robinhood may be affected more than some stocks — and the company hasn’t been around long enough to prove it knows how to grow during prolonged market declines.
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