Stock Market Today, Aug. 7: DraftKings Surges 8% on Prediction-Market Growth After Q2 Results
DraftKings (NASDAQ:DKNG), a digital sports betting, fantasy sports, and iGaming platform, closed at $24.03, up 8.39%. Investors focused on prediction-market and customer-activity growth after Q2 results missed expectations. Trading volume reached 36.1M shares, coming in about 173% above its three-month average of 13.2M shares. DraftKings IPO'd in 2019 and has grown 145% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) rose 0.59% to 7,756, while the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 1.28% to 26,686. Among online gaming, sports betting, and digital entertainment peers, Flutter Entertainment (NYSE:FLUT) closed at $94.74, up 1.86%, while Rush Street Interactive (NYSE:RSI) finished at $24.86, down 0.88%, highlighting mixed trading across sector rivals.
What this means for investors
While the headline of DraftKings’ sales dropping 5% may look bad at first blush, it was actually a pretty solid quarter. In a quarter where many favorites won, or “customer-friendly sport outcomes” occurred (as DraftKings called it), most of the company’s non-sales figures were fine:
- sports consumer volume rose 15%
- monthly unique payers (MUPs) jumped 9%
- annualized total volumes on its predictions services quintupled from April to July
- maintained 2026 guidance
- announced core betting business to generate $1 billion in adjusted EBITDA this year
That said, I’m surprised the market is this optimistic about the results, especially given that the company whiffed on both the top and bottom lines relative to analysts’ estimates. Sure, prediction markets may be the future for DKNG stock -- and it seems to be off to a good start in that arena -- there are still a lot of regulatory hurdles to clear. And that is before we figure out if there ends up being any cannibalization between sports betting and predictions.
I understand the excitement surrounding the stock, but I’m not rushing to buy today.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool recommends Flutter Entertainment Plc. The Motley Fool has a disclosure policy.
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