Bank of America raises DraftKings’ prediction market TAM to $1.9 trillion but keeps Neutral rating as growth risks weigh on shares.
DraftKings (NASDAQ:DKNG) shares have fallen nearly 17% from recent highs, trading at $23.50 after swinging between $23.50 and $30 since May. The decline reflects investor uncertainty over prediction market growth versus profitability risks ahead of major sporting events.
Bank of America increased its long-term prediction market total addressable market estimate to $1.9 trillion from $1.3 trillion but left earnings forecasts unchanged. DraftKings’ annualized prediction market volume reached $3 billion in May, with projections rising to $9 billion in June, while its market share climbed to over 2% on certain days.
Shares dropped another 4% on Thursday as analysts highlighted the bull-bear debate around valuation, core sports betting trends, and the company’s ability to capture 5% to 10% market share by 2027.