Robinhood's retail customers have pulled back from the frenzied trading activity that peaked in late October, according to the platform's Chief Investment Officer (CIO), signaling a potential shift in retail sentiment heading into 2026.

Robinhood Sees Retail Trading Cool After October Peak as 2026 Growth Slows

Stephanie Guild told CNBC that while customer participation remains elevated, "net buying has trailed off a bit from our customer base from that sort of peak October 29th period."

The comments came as Guild outlined the company's market outlook for 2026, projecting S&P 500 returns of roughly 8.7 percent compared to the double-digit gains retail traders enjoyed throughout 2025.

The cooling activity follows a record-breaking third quarter when Robinhood processed 26.8 million funded accounts and posted transaction revenue of $730 million, up 129 percent year-over-year. Cryptocurrency trading revenue alone surged over 300 percent to $268 million during the period, while options revenue climbed 50 percent to $304 million.

Tech Valuations Draw Scrutiny

Guild expressed skepticism about the sustainability of technology sector gains, noting that Wall Street expects tech earnings to grow 27 percent in 2026 compared to a historical average of 12 percent since 2011. She suggested the artificial intelligence boom is becoming commoditized, with new large language models "named after fruits and vegetables" failing to demonstrate clear revenue impact.

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"I really think that's going to start to be a commodity," Guild said of AI models from OpenAI, Meta, and Google. "It will start to be like, where is the rubber meets the road and where is it actually improving efficiencies, cutting costs and creating actual revenue."

The comments reflect growing concern that froth has built up in AI-related stocks, even as Robinhood's prediction markets are scaling fast, turning sports-linked contracts into a material revenue stream. The platform traded over 9 billion prediction market contracts since launching the product in March, attracting more than 1 million users.

Geographic Bets Favor China Tech

While tempering expectations for U.S. tech stocks, Guild highlighted China as an attractive opportunity for 2026. She pointed to "pretty inexpensive" valuations in Chinese technology companies and noted that open-source AI models developed in China "will probably start to be attractive for companies who can't necessarily afford some of the other ones that are out there."

The bullish China call contrasts with Guild's more cautious stance on European markets, where she noted that roughly half of 2025 returns came from euro appreciation against the dollar rather than underlying business performance. She suggested that currency tailwind has largely played out.

Platform Expansion Offsets Trading Slowdown

Robinhood has moved aggressively to diversify revenue beyond traditional equity and options trading. The company acquired MIAXdx to gain independence from Kalshi in prediction markets, with a CFTC-licensed launch targeted for 2026. The platform also extended prediction market access to 24/7 trading, following Kalshi's lead.

CEO Vlad Tenev has called tokenization "the biggest innovation in capital markets" in over a decade, as the company pursues plans to let users pledge Apple shares as crypto loan collateral through a three-phase roadmap toward fully permissionless equity trading.

Robinhood shares surged over 200 percent in 2025, making it one of the top-performing S&P 500 stocks. Morgan Stanley raised its Q4 2025 earnings estimates for the company by 5 percent in late December, citing strong transaction activity across brokers and exchanges during the quarter.

Platform assets reached $333 billion in Q3 2025, up 119 percent year-over-year, driven by net deposits of $20.4 billion during the quarter. Robinhood Gold subscriptions nearly doubled to 3.9 million, contributing to record cash sweep balances of $35.4 billion and margin lending of $13.9 billion.