(Reuters) -Robinhood Markets 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 (NASDAQ:HOOD) 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 (NASDAQ:COIN) 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 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.