Robinhood vs. Schwab: Chase Potential or Stick With Profitability?

As the investing landscape evolves at breakneck speed, two online brokerages, Robinhood Markets HOOD and Charles Schwab SCHW, stand at the forefront. Both are competing for market share in the digital investing and wealth management space. While HOOD has redefined trading with its sleek, mobile-first platform and growing presence in crypto and fintech innovation, SCHW remains a powerhouse in wealth management, offering a full-service ecosystem trusted by millions of long-term investors. Hence, let’s find out which brokerage stock will provide more upside in 2026 — one that is still scaling its model or the other that is built to compound through cycles.The Case for RobinhoodRobinhood has redefined retail investing through its tech-first, commission-free trading platform. By building a sleek, intuitive mobile platform with zero-commission trading, it has attracted millions of retail investors. It had 13.8 million monthly active users in the third quarter of 2025. This digital-native strategy has enabled the company to scale rapidly across the United States, and now, it's setting its sights on global markets.Robinhood agreed to acquire PT Buana Capital Sekuritas and PT Pedagang Aset Kripto, marking its entry into Indonesia and accelerating its Asia-Pacific (APAC) expansion plan. This signals a shift toward international expansion beyond its U.S.-centric base. Robinhood is also offering tokenized U.S. stocks and ETFs across 31 EU/EEA countries with 24/5 commission-free trading and aims to tokenize private companies. Expanded crypto services, a proprietary blockchain and future global banking products, along with new offices in Toronto and plans for APAC, position the company as a rising global fintech ecosystem. Further, Robinhood is turning the prediction market boom into a structural growth engine. In partnership with Susquehanna International Group, the company is acquiring a 90% stake in MIAX Derivatives Exchange (a regulated derivatives exchange). Through this, it plans to launch a dedicated futures and derivatives exchange and clearinghouse by 2026 and position prediction markets as a long-term core business. HOOD is also evolving into more than just a trading app. Recent additions like IRAs, crypto wallets and a cash card indicate a shift toward building a full financial ecosystem. This strategy deepens user engagement and boosts revenue per customer, positioning the company as a long-term financial partner for its users.Unlike traditional brokerages, Robinhood operates on a lean, cloud-based infrastructure. This allows low operating costs, efficient trade execution and faster product rollouts. As its user base grows, these efficiencies are expected to drive margins. Its tech-powered model enables cost-effective entry into new markets, unlocking a larger global opportunity.The Case for SchwabWith almost $12 trillion in total client assets and a dominant position in both retail brokerage and advisor custody, Schwab benefits from deep client relationships and recurring revenue streams. Its acquisition of TD Ameritrade (“TDA”) in 2020 solidified its leadership among retail and institutional investors.Additionally, at a time when the majority of the wealth management industry is focusing more on digital-first solutions, Schwab is doubling down on its physical presence. The company plans to open 16 new branches, expand 25 existing ones and hire more than 400 branch-related roles. Further, in November 2025, it announced a deal to acquire Forge Global Holdings, Inc. for almost $660 million. The move aligns with Schwab’s strategy to offer private market capabilities to retail and advisor clients.A key strength of Schwab is its diversified revenue base, which includes net interest income (NII), asset management fees and advisory services. Rising interest rates over the past two years significantly boosted the company’s net interest margin (NIM). Also, its focus on repaying high-cost bank supplemental funding balances will drive NIM. By the end of September 2025, the bank's supplemental funding balance was down 85% to $14.8 billion from a peak of $97.1 billion recorded in May 2023. Schwab’s RIA custody business is one of the largest in the United States, and demand for independent advisors continues to grow. The integration of TDA enhanced the company’s ability to scale and serve this high-margin segment.Schwab is modernizing its platform to appeal to younger investors with improved digital tools, and aims to launch spot Bitcoin and Ethereum trading by mid-2026. This move is in sync with changing investor behavior, as clients seek diversification. The company’s scale and trusted platform position it well to serve as a bridge between traditional finance and digital assets, especially as cryptocurrency adoption becomes increasingly mainstream.How Do Earnings Estimates Compare for HOOD & SCHW?Over the past seven days, the Zacks Consensus Estimate for HOOD’s 2025 earnings has been revised upward, while 2026 earnings have remained unchanged. This implies growth of 86.5% and 20.2% for 2025 and 2026, respectively.Earnings Estimates for HOOD Image Source: Zacks Investment ResearchThe earnings estimates for 2025 and 2026 have been revised north over the past week. The consensus mark for SCHW’s 2025 and 2026 earnings suggests 48.6% and 16.4% growth, respectively. Earnings Estimates for SCHW Image Source: Zacks Investment ResearchHOOD & SCHW: Price Performance & Valuation AnalysisIn 2025, shares of Robinhood have performed extremely well, given the bullish investor sentiments on the back of solid expansion efforts. The stock has soared 203.5%, while Schwab gained 35%. In terms of investor sentiment, HOOD has the edge, making it a momentum play.2025 Price Performance Image Source: Zacks Investment ResearchValuation-wise, HOOD is currently trading at the 12-month trailing price-to-tangible book (P/TB) of 12.96X. The SCHW stock, on the other hand, is currently trading at the 12-month trailing P/TB of 7.76X. HOOD & SCHW P/TB Ratio Image Source: Zacks Investment ResearchThus, Schwab is trading at a discount compared with HOOD.Robinhood or Schwab: Which Stock Fits Your Risk Profile?Robinhood looks like the higher-risk, higher-reward choice for 2026. The company is quickly evolving from a trading app into a broader fintech platform, layering in IRAs, wallets and cash products to deepen engagement and lift revenue per customer. More importantly, the company is pushing beyond its U.S. base with APAC expansion and tokenized stock offerings in Europe, while its planned move into futures, derivatives and prediction markets could open entirely new, scalable revenue streams.Nonetheless, HOOD isn’t cheap on a price-to-tangible book basis, and after a massive 2025 run, volatility is part of the package. But with earnings estimates trending higher and a lean, cloud-based model that can translate growth into margin leverage, Robinhood offers the kind of asymmetrical upside that can justify taking a calculated bet.Currently, both HOOD and SCHW carry a Zacks Rank #3 (Hold). 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Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks