Shares of DraftKings (NASDAQ: DKNG) surged more than 11% on Tuesday, marking the stock's largest one-day percentage gain in over three years, after the company disclosed strong growth in activity on its prediction markets platform. The move came following a regulatory filing that highlighted accelerating trading volume on DraftKings Predictions, the firm's entry into the rapidly expanding prediction markets industry.
According to the company's SEC filing, annualized consumer trading volume on DraftKings Predictions increased 24% month over month to $1.3 billion in May. Annualized total trading volume rose even faster, climbing 34% from April to reach $3.1 billion. DraftKings noted that these figures are preliminary, based on internal data, and remain subject to change.
The results suggest growing adoption of the company's prediction market offering, which allows users to trade contracts tied to outcomes ranging from sporting events to financial markets and geopolitical developments. The category has attracted significant attention in recent years as prediction markets expanded beyond traditional sports wagering. To compete in this space, DraftKings and rival FanDuel each launched their own prediction market platforms after acquiring regulated futures exchanges and building new products.
Despite the recent growth, DraftKings remains much smaller than established prediction market operators. According to Dune data, Kalshi generated $10.4 billion in sports trading volume during May alone. However, DraftKings benefits from years of experience acquiring and retaining sports-betting customers, and it has access to potential users in large states that have not legalized traditional sports betting, including Texas and California. The timing may also prove favorable as the company positions itself ahead of the 2026 FIFA World Cup, which is being hosted by the United States, Canada, and Mexico.
Industry analysts continue to see long-term potential in prediction markets. TD Cowen analysts wrote in a research note on Monday, "We view prediction markets as a large, early-stage opportunity that expands the addressable market, with meaningful upside potential over time but limited reliance in the near term." The firm maintained a Buy rating on DraftKings and a $30 price target. According to TheFly, TD Cowen also said DraftKings' core operation is "inflecting toward durable profitability, driven by product depth, structural hold, and operating leverage," and named the stock its top pick among small- and mid-cap stocks.
Other Wall Street firms remain constructive as well. UBS recently maintained its Buy rating and raised its price target to $49. From a technical perspective, DraftKings has improved significantly in recent weeks, with shares trading above their 20-day, 50-day, and 100-day moving averages. However, the stock remains below its 200-day moving average, suggesting longer-term resistance remains in place. The stock's relative strength index stands at 51.23, indicating neutral momentum, with technical analysts identifying resistance near $32 and support around $23.50.
As prediction markets continue to gain popularity, investors will be watching whether DraftKings can convert growing trading activity into a meaningful new source of long-term revenue growth. For context on broader market trends, see our coverage of NEAR Price Forecast and Duolingo Stock Jumps 8%.
This article is for informational purposes only and does not constitute financial advice.
