Could prediction markets become the next area of expansion for fintech stocks?
Prediction markets have gained significant traction in both finance and gaming over the past year. Platforms like Kalshi and Polymarket have expanded notably after receiving regulatory approval to offer contracts not just for political events but also for sports events.
Spurred by this success, various fintech firms have entered the prediction market landscape. Some are collaborating with established platforms such as Kalshi and Polymarket, while others are creating their own exchange platforms. Some fintech companies are also steering clear of more consumer-focused prediction markets, like those centered around sports events.
Webull (BULL 4.00%), Robinhood Markets (HOOD 2.09%), and Interactive Brokers (IBKR +0.28%) are three fintech stocks that could benefit from this trend. Let’s delve into each and evaluate the potential effects of prediction markets on their future performance.
Webull may rebound thanks to prediction market growth
Webull’s stock has faced challenges since it went public through a special purpose acquisition company (SPAC) merger last spring. Initially, the stock surged from about $12 to nearly $80, but it quickly lost those gains amid concerns about its ties to China.
Despite this, Webull reported robust growth. In the third quarter of 2025, revenue rose by 55% year-over-year, marking a shift from losses to net earnings. Its entry into prediction markets through a partnership with Kalshi last year has likely played a role in this growth.
For 2026, sell-side analysts predict a slight decline in earnings. However, the combination of prediction markets with growth in Webull’s stock, options, and cryptocurrency trading volumes could lead to unexpectedly positive results, aiding a recovery.
Robinhood’s future depends on prediction markets
Robinhood shares enjoyed a strong performance for much of 2025, but have since entered a downturn due in part to a surprising drop in stock and cryptocurrency trading volumes reported in November.
Investor optimism surrounds Robinhood’s venture into prediction markets. The company partnered with Kalshi earlier last year and announced a significant expansion of prediction contracts in December, offering hope for recovery.
However, preliminary data for December hints that the trading weakness may continue. Investors might want to wait for more trading volume data before making purchases.
Interactive Brokers adopts a different approach in prediction markets
Interactive Brokers has also ventured into prediction markets, but its offerings differ significantly. Currently, users cannot predict outcomes of NFL games on its platform.
The company’s ForecastTrader program focuses on contracts related to political, economic, and climate events rather than sports. Thus, this platform may not significantly impact Interactive Brokers like those of Robinhood and Webull. Still, the firm shows promising fundamentals.
Despite trading at a premium 33 times forward earnings, analysts forecast earnings growth of 11.4% and 12.3% for 2026 and 2027, respectively, which could help sustain the stock’s valuation and drive price increases in line with earnings growth.
