Which Brokerage Tech Stock is Poised for Bigger Gains: HOOD or TW?

Robinhood Markets HOOD and Tradeweb Markets TW are fintech brokerage innovators reshaping the landscape of electronic trading. HOOD is a retail-focused firm, offering commission-free stock, ETF, options and crypto trading to individual investors. On the other hand, TW is an institutional trading platform specializing in electronic trading of bonds, derivatives and other financial instruments.

Both leverage cutting-edge technology to disrupt traditional finance and capture growing market share. Hence, a question arises: which stock has stronger growth potential? Let’s break down the fundamentals, growth prospects and strategic moves that could determine whether HOOD or TW deserves a spot in your portfolio.

The Case for Robinhood

Robinhood is rapidly evolving into a full-scale fintech and digital banking platform through aggressive product expansion and diversification. Key launches include Robinhood Cortex, an AI assistant for market analysis; the Legend platform for advanced trading; and Robinhood Social, a verified trading community with copy-trading features. Users can now open multiple accounts for varied strategies, while new banking services and a Gold credit card extend the company’s personal finance reach.

Internationally, HOOD is pioneering tokenized U.S. stocks and ETFs across Europe with 24/5 commission-free trading and plans to tokenize private firms and expand prediction markets via Kalshi. The company’s push into crypto continues with acquisitions like Bitstamp and WonderFi, enhancing trading, staking and custody capabilities across 27 countries under upcoming MiCA regulations.

Revenue diversification is accelerating, with transaction revenues falling from 75% in 2021 to about 54% in 2025. Acquisitions of TradePMR and Pluto Capital bolster Robinhood’s wealth management and AI innovation capabilities, positioning it alongside incumbents like Schwab. With its blend of AI, crypto and finance tools, the company aims to become a global fintech leader, bridging traditional markets and digital assets.

However, the launch of stock tokens has triggered regulatory scrutiny. Lithuania’s central bank, Robinhood’s primary EU regulator, is seeking clarity on the product’s structure. Regulators are questioning the transparency and legality of offering such tokens to retail investors.

The Case for Tradeweb

Tradeweb is strengthening its global leadership in electronic trading through technology innovation, international expansion and diversification. Its heavy investment in automation and AI-powered tools, including AiEX, portfolio trading and electronic swaption protocols, has accelerated the shift from manual to digital trading. This is driving robust growth in fixed income and derivatives volumes.

Internationally, TW's emerging market revenues have tripled since 2023, with Asia-Pacific and EM swaps trading growing nearly tenfold since 2021. In credit markets, it now captures around 18% of U.S. investment-grade and 8% of high-yield electronic trading volumes.

Strategic acquisitions like ICD and Yieldbroker have expanded Tradeweb’s product range and recurring automation revenues, while cross-platform integration deepens client engagement. It is also advancing into digital assets and tokenization, leveraging blockchain partnerships such as the Canton Network to capitalize on regulatory and institutional demand for tokenized securities.

With record daily trading volumes above $2.4 trillion and more than 3,000 global clients, Tradeweb benefits from strong network effects and resilient infrastructure. Operating leverage from automation supports profitability, positioning the company to sustain its edge as electronic and digital markets converge.

Tradeweb’s growth could slow down if recent volatility-driven trading volumes ease. Its initiatives in blockchain and private credit also face execution, regulatory, and innovation-related risks.

How Do Earnings Estimates Compare for HOOD & TW?

Over the past 30 days, the Zacks Consensus Estimate for HOOD’s 2025 and 2026 earnings has been revised upward. The earnings estimates for 2025 and 2026 imply 74.3% and 18.6% growth, respectively.

Earnings Estimates for HOOD
 

The earnings estimates for Tradeweb’s 2025 have been revised upward, while estimates for 2026 have moved lower over the past month. The consensus mark for TW’s 2025 and 2026 earnings suggests 17.5% and 11.3% growth, respectively. 

Earnings Estimates for TW
 

HOOD & TW: Price Performance, Valuation & Other Comparisons

This year, shares of Robinhood have performed extremely well given the bullish investor sentiments. The stock has soared 254.1%, while Tradeweb lost 15.7% so far this year. Further, HOOD has outpaced the industry. In terms of investor sentiments, HOOD has the edge.

YTD Price Performance
 

Valuation-wise, HOOD is currently trading at the 12-month trailing price-to-tangible book (P/TB) of 16.12X. The TW stock, on the other hand, is currently trading at the 12-month trailing P/TB of 9.10X. 

HOOD & TW P/TB Ratio
 

Thus, Tradeweb is inexpensive compared with HOOD. 

Robinhood’s return on equity (ROE) of 21.74% is higher than TW’s 12.02%. This reflects HOOD’s efficient use of shareholder funds in generating profits.

ROE
 

Robinhood or Tradeweb: Which Fintech Stock Has the Edge?

Robinhood’s rapid transformation from a retail brokerage to a diversified fintech ecosystem gives it stronger long-term growth potential than Tradeweb. Its expansion into AI-driven tools, crypto and tokenized assets positions it at the forefront of next-generation finance, while its banking products and wealth management acquisitions diversify revenues and deepen user engagement. Despite regulatory scrutiny in Europe, HOOD’s innovation-driven model and accelerating earnings growth underscore its scalability and market momentum.

In contrast, Tradeweb remains a steady institutional player with solid fundamentals but faces slower growth prospects as volatility-driven trading normalizes. With superior earnings revisions, higher ROE, and a remarkable 254% year-to-date surge, Robinhood offers a more compelling mix of innovation, profitability and investor enthusiasm. Thus, HOOD is the better buy over TW at this stage.

Currently, Robinhood sports a Zacks Rank #1 (Strong Buy), while Tradeweb has a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research