DraftKings Upgraded to Buy by Bank of America as Shares Surge

Bank of America analysts upgraded DraftKings stock from “neutral” to “buy” on Monday, October 5, and shares jumped more than 8% on the day. The call follows a slide of more than 40% in 2026, according to The Daily Upside.

It also lands in the middle of the industry’s biggest debate: whether prediction markets will pull US bettors away from traditional sportsbooks.

Bank of America Moves DraftKings From Neutral to Buy

The upgrade gave DraftKings shareholders some badly needed relief. Shares rose more than 8% on Monday.

The bounce comes off a deep hole. The stock had fallen more than 40% this year before the call. Our earlier coverage tracked how DraftKings stock hit a three-year low, closing at $19 and dipping to $18.58 last week.

For a stock sitting near multi-year lows only days earlier, an 8%-plus gain on a single analyst call is a sharp swing.

What BofA Analysts Expect From DraftKings Prediction Markets

The bullish case rests on prediction markets. DraftKings launched its own exchange, DKeX, in June, and BofA sees real money in it.

Analysts believe there is a potential for $400 million in fees for DraftKings next year. They also think the company could make another $200 million–$400 million from market making, and is an opportunity that outweighs the risk of cannibalizing the sportsbook. Also, challenges in the courts to prediction markets that could work in DraftKings’ favor.

That last point deserves a closer look. DraftKings’ main business is still its traditional sportsbook. BofA’s view is that legal pressure on prediction markets could help a company with that kind of base.

The pressure is real. Lawmakers are already circling, as there is a Senate bill targeting prediction markets.

Record Sunday Volume for DraftKings Event Contracts

Early numbers support the upgrade. On Sunday, October 4, DraftKings’ event contracts business set a trading volume record of $218 million.

That total was up more than 50% from the NFL’s first Sunday this season. The growth lines up with football driving action as the season rolls on.

The record also landed just one day before the BofA upgrade, giving investors a fresh data point.

Sportsbooks vs. Prediction Markets: The Cannibalization Question

The upgrade cuts against a popular worry among investors. Many fear prediction markets will crowd out traditional sportsbooks.

Kalshi and Polymarket are the top two platforms, and most of their users’ money flows to sports. DraftKings and FanDuel answered by launching their own prediction markets. So far, the feared cannibalization hasn’t happened.

That’s the core of BofA’s math. If the sportsbook keeps its customers while the exchange adds new ones, DraftKings grows on both fronts.

The fight for customers keeps heating up. Sportsbooks and prediction markets competed for World Cup bettors, and marketing is a big part of that race. Novig’s trading volume jumped 94% after an ad campaign featuring Sydney Sweeney.

Gen Z Bettors and Record Handle Shape the Market

The broader market gives DraftKings room to grow. The American Gaming Association says US sports betting set a revenue record in 2025, with nearly $167 billion wagered.

Younger bettors make up a big share of that action. Bank of America Institute data shows Gen Z accounted for nearly half of all online betting in July, passing millennials for the first time.

A Betterment survey found two-thirds of Gen Z investors say they place sports bets. For that crowd, the line between trading and betting is thin, and prediction markets sit right on it.

What the DraftKings Upgrade Means for US Bettors

BofA’s upgrade is a bet that DraftKings can win in two lanes at once: the traditional sportsbook and the fast-growing event contracts market.

For you, that likely means more ways to bet the same games and more operators competing for your action.