Despite Robinhood's impressive financial results, my colleague Tom Lee from Fundstrat recommends investors stay away from this broker's stock. His updated list of key investment ideas for 2026 sparked heated debate: the bet is on JPMorgan and Arista Networks, while Robinhood landed on the underdog list.
Fundstrat's internal investment committee immediately clashed with Lee. Members felt he was underestimating a company that has effectively become a "darling" of the crypto industry. The most vocal opposition came from Kevin Simpson, founder and chief investment officer of Capital Wealth Planning. On a business news channel, he stated: "I could not disagree with this view more than I do right now."
Records That Fail to Convince
Simpson highlighted Robinhood's second-quarter results, which indeed look impressive. Annual revenue grew 32%, reaching a record $1.31 billion. Diluted earnings per share jumped 48% to $0.62. Net deposits hit a record $22 billion, up 28% compared to last year.
In Simpson's view, Robinhood has outgrown its pandemic-era image. He noted the acquisition of a licensed investment advisor and the launch of its own asset custody service as signs of business maturity. Brenda Vingiello, chief investment officer at Sand Hill Global Advisors, also disagreed with Lee, although she sold her Robinhood shares in June when growth stalled. She believes a crypto market recovery could push the price up again, as Robinhood's momentum remains closely tied to sentiment in the digital asset market.
Crypto Ambitions: Betting on Infrastructure
Robinhood's own crypto business, however, is contracting. Revenue from cryptocurrency transactions fell 38% year-over-year in the second quarter, to $100 million. But the company is betting on infrastructure. In July, Robinhood Chain launched—its own Layer 2 blockchain built on Arbitrum. The chain is designed for tokenized stocks, decentralized lending, and 24/7 trading.
According to DefiLlama, the total value locked (TVL) in Robinhood Chain has exceeded $550 million. About 25% of that amount comes from tokenized stocks and other real-world assets. The lion's share of TVL is stablecoins: more than half of the volume is in USDG, Robinhood's dollar-pegged token. One of its branded tokens triggered a meme coin surge immediately after listing. Whether tokenized stocks or crypto speculation will define the network's future remains unclear.
Lee's Alternative Ideas
Lee's other ideas did not provoke such a reaction. Arista Networks shares are rising on demand from the artificial intelligence industry, while JPMorgan is praised for its success amid the IPO market recovery. Robinhood shares were trading around $96, and the company's market capitalization reached $86 billion. The success of Tom Lee's other ideas may depend less on brokerage business growth and more on the development of Robinhood's crypto segment.
My analysis: The divergence of views on Robinhood reflects a fundamental question—whether the company remains a cyclical broker dependent on retail trading or is transforming into a next-generation technology platform. The record quarterly figures are impressive, but the current $86 billion valuation already prices in significant growth. Until there is clarity on the sustainability of crypto revenues and the scaling of Robinhood Chain, Tom Lee's caution looks justified, albeit counterintuitive.