Bull-bear update: Will prediction market top-line or bottom-line matter most?

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Bull-bear update: Will prediction market top-line or bottom-line matter most?

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DraftKings, Inc.

Bull-bear update: Will prediction market

top-line or bottom-line matter most?

Maintain Rating: NEUTRAL | PO: 27.00 USD | Price: 24.53 USD

Bull-bear deep dive amid recent stock volatility 25 June 2026

Shares of DraftKings (ticker: DKNG) have been volatile over the past month as investors Equity

debate potential prediction market volumes, and excitement about key sporting events

versus concerns on prediction market investment, core betting trends and hold volatility. Shaun C. Kelley

Since May, DraftKings shares rallied nearly +30% from an intraday low of $23.50 to an Research Analyst

BofAS

intraday high of $30 and have fallen back to ~$25 or -17% from the high. Inside, we lay shaun.kelley@bofa.com

out the latest bull-bear debate across prediction markets, the core business and Julie Hoover

valuation. Given recent trends and data, we raise our prediction market total addressable Research Analyst

market (TAM) to $1.9T from $1.3T, prior. We make no change to our estimates and julie.hoover@bofa.com

maintain Neutral. Dany Asad

Research Analyst

Predictions: Volumes accelerating, but losses may too BofASdany.asad@bofa.com

Bull: DraftKings released that annualized prediction market volumes reached $3B in

May, and we expect annualized volumes to triple to ~$9B in June. DraftKings is gaining

market share which has risen from ~1.3% in April to >2% on some days in June. Further,

Stock Datawe think marketing/product updates could drive DKNG’s market share toward 5-10% in

2027, which on a higher prediction market TAM implies $500M-$1B of revenue in 2027, Price 24.53 USD

at high incremental margins. Market making could drive further significant upside.