Robinhood jumps after robust growth in assets under custody in February

Robinhood Markets (HOOD.O), opens new tab shares climbed nearly 9% on Thursday after the brokerage reported strong growth in assets under custody for the month of February, signaling continued boost from a comeback in cryptocurrency and stock trading.

Assets under custody (AUC) grew 16% month-over-month to $118.7 billion at the end of February, the company's second consecutive month of breaching the $100 billion mark.

The Menlo Park, California-based company had reported $102.6 billion in AUC for the fourth-quarter ended Dec. 31, its highest since the meme stock trading frenzy in 2021.

Bernstein on Thursday began coverage on Robinhood with an "outperform" rating on expectation that the company's cryptocurrency revenue would grow nine-fold in 2025, and added that its "full suite crypto offering within a regulated broker platform is in a sweet spot."

Bernstein expects total market value of the cryptocurrency industry to reach $7.5 trillion in 2025 from about $2.6 trillion currently.

The brokerage said Robinhood had an advantage over other crypto exchanges such as Coinbase (COIN.O), opens new tab due to competitive fees, and as traditional brokers stay away from offering crypto trading services.

In mid-February, Robinhood reported a surprise quarterly profit and said it aims to deliver 'profitable growth' in 2024.

Robinhood has benefited from the increased activity from retail traders - its main client base - as bitcoin surpassed the record high of 2021 and climbed above $73,000, and the S&P 500 (.SPX), opens new tab hit a series of all-time highs this year.

It has been contending with a decline in active users on its platform in recent quarters, but has managed to grow revenue per customer.

Robinhood shares hit a fresh 2-year high on Thursday, but remain well below their July 2021 IPO price of $38.