Circle stock received renewed support from Bernstein after reporting second-quarter results that exceeded profit expectations despite softer revenue. The research firm maintained its Outperform rating and $140 price target, saying investor concerns about competition and reserve income may not fully reflect the company’s broader growth strategy.
Bernstein Maintains Bullish View on Circle
Bernstein kept its $140 price target on Circle stock following the stablecoin issuer’s second-quarter earnings. The firm said the latest results made the bearish case more difficult to support, even as the stock remained under pressure after recent market weakness.
Circle stock reported second-quarter revenue of $701 million, up 7% from a year earlier but slightly below analyst expectations. Earnings, however, exceeded forecasts. The company posted $48 million in net income and earnings per share of $0.18, both ahead of consensus estimates.
Bernstein said investors continue to focus on rising competition in the stablecoin market and the possibility of lower reserve income if interest rates decline. The firm argued that these concerns do not fully account for Circle’s distribution network and expanding business model.
Arc Blockchain and Partnerships Draw Attention
Bernstein pointed to Circle’s upcoming Arc public mainnet, scheduled to launch on Sept. 16, as another potential growth driver. The analysts said current market estimates do not appear to include future revenue from Arc’s gas fees, staking activities, or ecosystem partnerships.
The firm also noted that Circle stock raised its 2026 guidance for revenue outside its reserve income business and improved expectations for revenue-less-distribution-cost margins. Management expects to recognize approximately $180 million from Arc token presales during 2026.
Circle also continued expanding its infrastructure business during the quarter. The company secured approval to operate as a national trust bank and continued developing the Circle Payments Network while preparing Arc with founding validators that include several major financial and technology companies.
Bernstein wrote that “the market is underestimating Circle’s long-term growth prospects,” citing the company’s regulatory position, payment network, blockchain infrastructure, and distribution capabilities.
Reserve Income Still Leads Revenue Mix
Reserve income remained Circle’s largest revenue source during the quarter, contributing about 95% of total revenue. USDC circulation reached $73.3 billion, down 5% from the previous quarter but 19% higher than a year earlier.
However, Mizuho noted that USDC circulation declined sequentially during the quarter, while on-chain transaction volumes fell 31% from the previous three months. The firm also pointed to continued margin pressure across parts of Circle’s business.
Circle stock shares traded lower ahead of Thursday’s market open after closing the previous session near $63. The stock has declined roughly 20% since the beginning of the year.
Bernstein nevertheless maintained that expanding payment services, tokenized real-world assets, regulatory progress, and the launch of Arc could provide additional revenue streams beyond reserve income over time.
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