DraftKings is expanding into prediction markets beyond sports betting through partnerships and acquisitions, operating in 38 states including major markets like California and Texas. The company's existing sports betting infrastructure and market-making capabilities provide competitive advantages over pure prediction market platforms. While 2026 guidance disappointed analysts, prediction market revenue was excluded from guidance, representing potential upside. CEO projects predictions could generate up to $10 billion in gross revenue over time.

The article highlights DraftKings and Booking Holdings as two growth stocks with significant upside potential in 2026. DraftKings, down 37% year-to-date, has achieved GAAP profitability and entered the prediction markets business, with analysts projecting 65% upside. Booking Holdings, down 25% year-to-date amid AI disruption concerns, is executing well operationally and announcing a 25-for-1 stock split, with analysts seeing 53% upside potential.

BofA Securities analyst Shaun C. Kelley expects DraftKings to raise its FY28 revenue guidance to $8.5B-$9.1B from $7.1B, though EBITDA may be revised lower to $1.5B-$1.7B due to prediction market investments. The analyst projects prediction markets could reach $600B by 2028 with DraftKings capturing 10-20% market share, representing significant long-term growth potential despite near-term margin pressure.

Ten large-cap stocks experienced significant declines last week. Pinterest fell 21.73% after missing Q4 earnings and issuing weak Q1 guidance with multiple downgrades. DraftKings dropped 18.65% following disappointing Q4 results and below-estimate FY26 guidance. Other major losers included Astera Labs (down 23.74%), Medpace (down 20.69%), Zillow (down 20.89%), and Flutter Entertainment (down 18.88%), driven by earnings misses, analyst downgrades, and broader tech sector concerns about AI trade profitability.

DraftKings stock fell 13.73% after Q4 earnings beat expectations with 43% sales growth and tripled EBITDA, but conservative 2026 guidance projecting only 11% sales growth disappointed investors. Despite the decline, analysts note the stock trades at attractive valuations (2x sales, 21x free cash flow) with potential upside from margin expansion and growth in prediction markets and iGaming.

Wall Street rebounded Friday after softer-than-expected inflation data reinforced expectations for interest-rate cuts. Annual inflation slowed to 2.4% in January, the lowest since May 2025, while core inflation eased to 2.5%. Small caps led gains with the Russell 2000 climbing 1.8%. Commodities surged with gold up 2%, silver up 4%, and Bitcoin rallying 4.6%. Strong earnings from tech and other sectors drove individual stock gains, with Rivian jumping 27% and Coinbase surging 17%.

DraftKings announced a partnership with Crypto.com | Derivatives North America to expand DraftKings Predictions with first player-specific sports event contracts for NFL and NBA, along with broader prediction markets across soccer, MMA, golf, boxing, tennis, and Olympic Games. The expansion also establishes foundation for future categories including politics, culture, and entertainment.

Dave's Hot Chicken launches its first-ever Super Bowl commercial and announces major sports partnerships including a $10,000 Championship Heat Check with DraftKings and a collaboration with Bleacher Report featuring Detroit Lions running back David Montgomery. The brand continues its rapid expansion with plans to open 150+ locations this year.

Ten large-cap stocks experienced significant declines during the week of January 19-23, 2026. AeroVironment led losses with a 19.45% drop following a government stop work order. DraftKings fell 14.4% due to Massachusetts blocking sports-related contracts, while Abbott declined 12.23% after missing earnings expectations. Other major losers included AppLovin (14.68%), Shopify (13.51%), Flutter Entertainment (13.07%), and West Pharmaceutical Services (13.27%).

DraftKings, Flutter Entertainment, and Robinhood Markets are entering the prediction markets sector to compete with first-movers like Kalshi and Polymarket. DraftKings launched DraftKings Predicts to enter markets where sports betting is illegal, Flutter launched FanDuel Predicts through a CME partnership, and Robinhood generated $100 million in quarterly prediction market revenue by Q3 2025. These moves aim to penetrate new markets and address concerns about declining market share in traditional sports betting.

While Jumia Technologies is a popular way for U.S. investors to access Africa's growth story, Super Group (SGHC) offers a compelling alternative. The sportsbook and online casino operator has surged 94% over the past year, with Africa revenue tripling since 2021 to represent 40% of total revenue. Super Group boasts no debt, $462 million in cash, and returns capital to shareholders through dividends—unlike competitors DraftKings and Flutter Entertainment.

The article recommends three stocks trading below their recent highs as buying opportunities: MercadoLibre, a Latin American e-commerce leader facing temporary margin pressure from a free-shipping promotion; Chewy, a pet supply retailer with 84% recurring subscription revenue and growing customer base; and DraftKings, a sports-betting platform experiencing weakness from increased competition but positioned in a growing market.