DraftKings (DKNG) stock closed meaningfully higher on June 9 after the company’s 8-K disclosed accelerating momentum in its fledgling Prediction Markets business.
In May, the Nasdaq-listed firm witnessed a 24% month-on-month increase in annualized consumer volume in its Predictions offering to $1.3 billion.
Meanwhile, annualized total volume traded came in at $3.1 billion, representing a 34% increase, according to the press release. That said, DraftKings shares remain down more than 20% year-to-date.
Significance of the Update for DraftKings Stock
For months, the bull case for DKNG stock has been rooted in the company’s ability to translate its sportsbook brand equity into traction in prediction markets.
And the May numbers suggest the bet is paying off. DraftKings Predictions launched in December 2025, yet monthly volume has already started seeing sequential growth.
That trajectory matters because prediction market volume is inherently compounding — as liquidity deepens and more contract types go live, more users engage, which attracts more liquidity.
With the platform spanning 17 states for sports-related events, the geographic runway alone signals a meaningful growth lever.
In fact, Morningstar sees DraftKings as strongly positioned to participate in a $60 billion North American sports betting, iGaming, and prediction market opportunity by the end of this decade.
Morgan Stanley Sees Massive Upside in DKNG Shares
The prediction markets update made Morgan Stanley analysts maintain their “Overweight” rating on DraftKings shares, with a $39 price target indicating potential upside of nearly 45% from here.
In its research note, the firm estimated $50 million in revenue from Predictions this year, followed by a sharp increase to $240 million in fiscal 2027.
Crucially, marketing spend has so far been minimal, with early retention signals resembling DKNG online sports betting initial customer cohorts — an encouraging parallel.
According to Morgan Stanley, the market is assigning little to no value to DraftKings Predictions and future iGaming legalization tailwinds — a disconnect it believes won’t persist as the sales ramp begins.
DraftKings Remains Buy-Rated Among Wall Street Firms
While not as bullish as Morgan Stanley, other Wall Street firms remain constructive on DraftKings as well.
The consensus rating on DKNG shares sits at “Moderate Buy” currently, with the mean price target of nearly $34 indicating potential upside of more than 20% from here.
