Shares of Robinhood Markets (HOOD) have shed nearly a third of their value this year, and recently reported first-quarter results aren’t helping matters. In the first three months of 2026, cryptocurrency trading activity on the popular trading platform slumped along with bitcoin prices. Meanwhile, overall customer assets dropped 4.6% on a sequential basis.
Those data points coupled with the fact that stock is considered expensive may be enough for some investors to wait on the sidelines and for some traders to take a pass on the Direxion Daily HOOD Bull 2X ETF (HODU). However, HODU, which attempts to deliver 200% of the daily performance of the financial services stock, may be worth monitoring. Indeed, a case can be made that Robinhood has been punished too harshly this year.
“Results didn’t look terrible to us, with the firm maintaining momentum in net deposit growth of $18 billion (representing 22% annualized growth), arguably the key leading indicator of future performance, with the firm continuing to execute against initiatives laid out in its fourth-quarter call,” observed Morningstar analyst Sean Dunlop.
There’s Hope for HODU
At the moment, both Robinhood and HODU look like risky bets. That’s due to the sheer fact that the stock is mired in a slump. However, this is still a growth company — one that’s executing on multiple compelling fronts, including premium credit cards and in the fast-growing prediction markets space.
Event contracts are already a solid revenue contributor for Robinhood. The company has largely operated in the space through a partnership with Kalshi. The company’s Rothera prediction market platform could shift dependency away from Kalshi while improving Robinhood’s yes/no derivatives economics. That could provide opportunities to capitalize with HODU, and it’s only one element in Robinhood’s broader growth equation.
“We’re encouraged to see the platform broaden its reach into stickier products like Robinhood banking—quietly approaching $2 billion in deposits shortly after launch—and retirement accounts ($27.4 billion in assets), which could gradually reduce the likelihood of customer ‘graduation’ to larger incumbent platforms as clients age and accrue assets,” added Dunlop.
As a leveraged ETF, HODU is not a buy-and-hold instrument. But tactical traders, take heart. Robinhood’s long-term growth outlook remains on solid ground. That could provide plenty of chances to capitalize with the Direxion ETF.
“Our longer-term outlook for the firm remains quite constructive, with our forecasts calling for 10-year compound annual growth rates of 13.0%, 14.2%, and 17.3% in revenue, operating profit, and diluted EPS, respectively,” concluded Dunlop.
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