Roblox stock rockets 25% pre-earnings as user growth, AI bets fuel Wall Street hype

Roblox Corporation (NYSE: RBLX) shares surged 25% in premarket trading on Thursday ahead of its Q2 earnings report.

The stock’s already been on a tear this year, as it doubled since January and hit fresh all-time highs along the way.

The investors are leaning into the hype, as they bet big on Roblox’s growth story and its power as a leader in the gaming space.

The company’s momentum is fueled by expectations of robust financial results, breakneck user expansion, and bullish Wall Street sentiment.

Roblox’s Q2 results, scheduled for July 31 before the market opens, are being closely watched. Consensus estimates are for revenues in the range of $1.02 to $1.045 billion and strong year-over-year improvements in bookings. 

If the company matches or beats these expectations, analysts believe the stock could extend this rally and cement its status as one of 2025’s top growth stories.

Roblox stock: What's fuelling the rally?

The recent rally for Roblox stock came as the market sentiment remains bullish on expectations of strong Q2 earnings.

For Q1 2025, Roblox reported revenues of $1.21 billion, a 29% year-over-year increase, beating analyst forecasts by $70 million and showcasing strong demand for its immersive virtual world.

The daily active users of the platform reached a record 97.8 million, with a surge in engagement among wider and international audiences.

These trends have enabled Roblox to consistently deliver high double-digit gains in free cash flow and bookings, with a notable 31% spike in bookings during Q1, and management projecting over $5.27 billion in revenues for the full year.

A big part of the push comes from fresh investments in artificial intelligence and creator tools like “Cube,” which simplifies the process to churn out high-quality content.

Moreover, Roblox is leaning into ads and e-commerce, as the company eyes fresh revenue streams to fuel its next phase of growth.

What analysts say?

Analysts remain overwhelmingly optimistic about Roblox’s future.

This week, JPMorgan raised its price target to $125, citing “serious momentum” powered by a surge in concurrent users, peaking at 32 million recently, and record engagement on blockbuster experiences. 

BMO Capital echoed this sentiment by upping its price target to $135 and lauding the platform’s successful monetization of breakout games like “Grow a Garden.”

Broadly, out of 25 analysts, 15 rated the stock a “Strong Buy,” with only two on the “Sell” side, although some caution that its lofty valuation may be outpacing fundamentals.

Market-wide tailwinds have provided additional support.

The S&P 500 and Nasdaq both hit record highs this week as optimism around US economic growth, a finalized Vietnam trade deal, and strong demand for digital experiences bolstered technology names, with Roblox standing out among the sector’s winners. 

The broader gaming sector remains buoyant, with Roblox aiming for a commanding 10% share of the global $180 billion gaming market.