Bernstein reiterated a $140 price target and Outperform rating on Circle stock Thursday, arguing the stablecoin issuer's mixed second-quarter results undercut the bearish case against it. Circle beat on profitability even as revenue missed estimates and USDC circulation slipped from the prior quarter. Bernstein points to Circle's coming Arc mainnet launch as a path to revenue beyond stablecoin reserve interest.
Circle stock climbed Thursday after Bernstein reiterated its Outperform rating and $140 price target, arguing that mixed second-quarter results undercut the bearish case against the company. Bernstein's target implies roughly 114% upside from CRCL's latest price, though the firm had trimmed it from $190 in late July.
Bernstein calls Q2 a "counter thesis to the bears"
Bernstein analysts led by Gautam Chhugani, in a Thursday note to clients, described Circle's second-quarter report as a "counter thesis to the bears." Circle reported $701 million in Q2 revenue, up 7% year over year but about 2% below analyst estimates.
However, adjusted EBITDA rose 8% year over year to $143 million and basic earnings per share of $0.19 beat expectations. Net income from continuing operations reached $48 million, a $530 million improvement from the prior year's loss, which had included costs tied to Circle's IPO.
USDC growth cools but stays up sharply for the year
USDC circulation ended the quarter at $73.3 billion, up 19% year over year but down 5% from the $77 billion Circle reported at the end of the first quarter. Onchain transaction volume reached $14.8 trillion for the quarter, up 151% year over year.
Circle also received final approval from the US Office of the Comptroller of the Currency to establish Circle National Trust, a federal charter that could eventually let the company manage USDC reserves. Bernstein said the market underestimates Circle's distribution, liquidity, and regulatory advantages, and expects USDC adoption to expand into payments and tokenized real-world assets beyond crypto trading.
Arc mainnet could diversify revenue beyond reserves
Reserve income still generated roughly 95% of Circle's total revenue, leaving the company exposed to interest-rate cuts that would reduce returns on the assets backing USDC. Bernstein pointed to Circle's Arc blockchain as a possible source of revenue beyond that reserve income.
The public mainnet is set to launch Sept. 16 with 11 institutional validators, including BlackRock, Mastercard, Visa and Standard Chartered. Management raised its 2026 forecast for other revenue and its revenue-less-distribution-cost margin. The revised outlook includes an expected $180 million from an Arc token presale.
Circle stock faces resistance near $70
CRCL rose 3.18% to $65.29 on Thursday, trading between $60.01 and $65.91 and moving above the midpoint of its daily Bollinger Bands at $63.84. The relative strength index rose to 47.9, up from its 44 moving average, though the reading stays below the neutral 50 level that would signal firm buyer control.
Immediate resistance sits between $68.80 and $70, while a drop below $60 would expose the lower Bollinger Band near $58.87. Despite Thursday's advance, Circle remains in a broader downtrend after falling from above $130 in May, so Bernstein's $140 target depends on Circle restoring USDC growth, launching Arc successfully, and developing revenue sources less sensitive to US interest rates.
Source: crypto.news
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