Robinhood (HOOD) Stock: Retail Investors Get Access to Private AI Startups

TLDR

• Robinhood is creating a fund to let everyday investors buy into private AI startups through Robinhood Ventures Fund I.
• The closed-end fund requires investors to hold shares long-term with limited redemption options.
• HOOD shares fell 11% after earnings despite revenue doubling to $1.27 billion in Q3.
• Crypto revenue missed expectations and the company raised its 2025 expense guidance.
• Analysts increased price targets by 13% on average, pointing to potential buying opportunity.

Robinhood Markets wants to open private AI investing to regular people. The company filed with the SEC in October to create Robinhood Ventures Fund I.

This closed-end fund will let retail investors buy shares in at least five private companies. Think OpenAI and Anthropic, the kind of startups usually reserved for wealthy institutional investors.

Robinhood Markets, Inc., HOOD

But there’s a catch. Investors won’t be able to easily sell these shares. The closed-end structure means you’re locked in, and mass withdrawals could create liquidity problems.

CEO Vlad Tenev isn’t sweating the AI bubble talk. He told the Financial Times that Robinhood customers are piling into AI investments. They know the risks, he said, but they want access anyway.

Revenue Doubles But Stock Takes a Hit

Robinhood posted monster Q3 numbers on November 6. Revenue hit $1.27 billion, crushing estimates of $1.15 billion. That’s 100% year-over-year growth.

Earnings per share tripled to 61 cents. Transaction revenues jumped 129%, with crypto leading the charge at 300% growth.

So why did the stock drop 11%? Three reasons. First, crypto revenue missed expectations despite the big percentage gain. Second, the earnings beat came partly from a lower tax rate, not operational strength. Third, management hiked 2025 expense guidance.

The company plans to spend more on prediction markets and the new Ventures fund. Prediction markets have doubled in volume every quarter since the 2024 election.

What Analysts Are Saying

Here’s where it gets interesting. While the stock tanked, analysts raised their price targets. The average increase was 13% among those who updated forecasts on November 6.

Updated analyst targets average $157.50, suggesting 24% upside from current levels. The broader consensus sits at $132, implying just 4% gains.

TipRanks shows a Moderate Buy rating with 13 Buy ratings, five Holds, and one Sell. Despite the drop, HOOD is still up over 200% in 2025.

Diversification Paying Off

Robinhood now has 11 business lines generating over $100 million annually. That’s important because it reduces crypto dependency.

Average revenue per user climbed 82% to $191. Equity revenues rose 132% and options were up 50%.

The stock trades just 17% below its all-time high. Crypto assets also fell on November 6, adding pressure to shares.

The Ventures fund represents Robinhood’s latest expansion move. Money managers are hunting for new capital sources in private markets, especially after Trump’s executive order made it easier to include private equity in retirement plans.

Robinhood is betting retail investors want a piece of the private AI boom. The question is whether they understand the risks of illiquid, long-term investments in startups that could go to zero.

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