Five years from now, I believe Robinhood Markets (HOOD 2.79%) stock will be higher than it is today. Granted, that's a vague prediction, but it's also one I feel pretty confident in. After all, while trying to pinpoint future stock prices is often a useless exercise, identifying long-term trends is far easier.

So, what are these long-term trends, and why do they give me such confidence that Robinhood stock will rise over the next five years? Let's dig in and explore them one by one.

A large question mark on top of a stock chart.

Image source: Getty Images.

Robinhood's growth engine

First off, to get a grasp of where Robinhood stock might be five years from now, it's important to understand its current state of affairs.

The company operates an online brokerage offering customers the ability to trade stocks, options, futures, crypto, and other financial instruments. However, it does not generate most of its revenue through traditional commissions. Instead, the company creates revenue in two main ways:

First, it routes customer orders to various market makers, which pay Robinhood. This process is called payment-for-order-flow (PFOF).

Second, the company generates net-interest revenue from the cash held in its customers' brokerage accounts. Currently, Robinhood has over $221 billion in assets under management (AUM). Growth of its AUM will drive higher PFOF revenue and net-interest revenue.

What's more, Robinhood's AUM is growing at an incredible rate. For example, over the last year, the company's total AUM has grown from $130 billion to $221 billion, an increase of 70%.

Robinhood's management

Thanks to its business model and its surging popularity, Robinhood is growing rapidly. But, in my opinion, it's the company's management that will propel its stock higher over the next five years.

Robinhood is led by co-founder and CEO Vlad Tenev, a 38-year-old Bulgarian-American with a penchant for thinking big. He has announced several innovative endeavors at Robinhood:

  • Artificial intelligence (AI): Integrating AI into investing with the launch of Cortex, Robinhood's AI system.
  • Tokenization: This could provide access for those seeking to monetize (and trade) everything from art to mortgages to private equity shares.
  • Prediction markets: Robinhood has already launched some prediction contracts, allowing users to place bets on real-world outcomes, ranging from politics to economic data.

In short, Tanev isn't satisfied with simply running another online brokerage. He wants to push the boundaries of what is possible and expand into other areas adjacent to the traditional brokerage segment.

Where will Robinhood stock be in five years?

While no one can say for sure where Robinhood stock will be in 2030, I do think the stock will rise from its current level.

As of this writing, Robinhood has a market capitalization of around $100 billion. That makes it around the 100th-largest company in America -- roughly the same size as Intel. By 2030, I think RobinHood could move up in that ranking, perhaps challenging one of its rivals, Charles Schwab, which has a market cap of around $175 billion, making it about the 50th-largest American company.

In any event, I think Robinhood's robust growth and visionary leadership make it a stock to consider right now.