Macquarie: DraftKings One of the Most Compelling Growth Stories in Gaming
Posted on: May 9, 2026, 01:27h.
Last updated on: May 9, 2026, 01:27h.
- The stock is showing signs of life
- The company flagged progress with its prediction market product
- Macquarie analyst sees significant upside potential for DraftKings shares
DraftKings’ (NASDAQ: DKNG) nearly unrivaled leadership in online sports betting (OSB) coupled with signs the company is making strides with its new prediction market offering are among the reasons some analysts view the stock as one of the more attractive growth opportunities in the gaming space.
In a new report to clients, Macquarie analyst Chad Beynon said DraftKings “remains one of the most compelling structural growth,” citing the aforementioned factors. The stock jumped 8.64% this week, helped in part by a first-quarter earnings that included encouraging details on DraftKings Predictions.
The predictions product is fast evolving, with market making already launched and the proprietary exchange to follow in the coming weeks,” observes Beynon. “DKNG is now positioned to ramp up predictions customer acquisition spend, which it expects to drive a significant increase in monthly unique players (MUPs) in the back half of the year.”
He reiterated an “outperform” rating on the stock with a 12-month price target of $38, implying upside of 59.1% from Friday’s closing price.
DraftKings Predictions Could Be Long-Term Growth Driver
DraftKings rolled out DraftKings Predictions last December and there are already signs that the gaming company’s event contracts offering could be a catalyst for long-term growth.
In a letter to shareholders, co-founder and CEO Jason Robins points out that April volume on DraftKings Predictions jumped to $1 billion while annualized turnover stood at $2.3 billion, representing month-over-month increases of 38% and 43%, respectively.
So while DraftKings has a long way to be competitive with the likes of Kalshi from a market share standpoint, it has the ability to be a viable contender in the prediction market arena. Additionally, DraftKings can leverage its sports betting expertise for prediction market success – something it did with its daily fantasy sports (DFS) prowess following 2018 ruling on the Professional and Amateur Sports Protection Act (PASPA).
“We have seen this playbook before, when upfront investment secures the long-term growth runway,” adds Beynon.
Market Making Could Be DraftKings Catalyst, Too
DraftKings recently launched all-encompassing mobile application, also known as a super app, is already paying dividends in terms of driving prediction market customer acquisition costs lower by 80% last month. Alone, that’s impressive, but the operator has other prediction market levers to pull, including market making.
That’s a seamless transition for a company well-versed in sports trading and one that could be a driver of share price appreciation.
“We have also launched market making, which unlocks access to an additional layer of the value chain,” wrote Robins. “Market making is already generating a positive return for us. In the coming weeks, we expect to launch our proprietary exchange and to begin offering combos. Together, these moves will accelerate innovation, improve the customer experience, and strengthen our economics.”
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