Key highlights:

  • Bernstein kept its Outperform rating and $140 price target on Circle stock
  • The target implies about 59% upside from its current price
  • Analysts also said Circle's growth does not depend on the CLARITY Act passing

Wall Street research firm Bernstein is standing by its bullish view on Circle stock. Analysts led by Gautam Chhugani kept their Outperform rating and $140 price target on the shares after the company's quarterly results. 

They also said the CLARITY Act stalling in Congress would not stop the stock from reaching its target. The $140 project is about a 59% upside from CRCL's recent closing price of $87.

 

USDC growth is fueling the bullish Circle stock case

The stablecoin’s supply grew by $1.7 billion in the past week. This also ended a six months streaj of flat activity. USDC is used as collateral and a settlement tool in decentralized finance platforms, tokenized assets, and prediction markets.

Circle's business results articulated this growth in detail. The company reported second-quarter revenue of $701 million, up 7% from a year earlier. Net income came in at $48 million, and earnings per share hit $0.18, beating market forecasts.

Bernstein also highlighted how important Circle has been to the activity happening on-chain. The analysts noted that the firm accounts for a major share of decentralized-exchange trading and finance volumes. 

Additionally, the company's Agent Stack platform, which launched earlier this year, supports hundreds of paid services. Almost all agent-based payment volume on the network settles transactions in USDC.

Why Bernstein’s thesis doesn't hinge on CLARITY Act

Much of the attention on Circle stock is focused on the CLARITY Act passing. This bill is expected to get a procedural vote on September 15 after Senators resume from their recess.

Bernstein disagrees. The analysts said their bullish call does not depend on the bill passing next month.  "We believe this growth cycle is independent of the Clarity Act passing in the September session," they noted.

They added that regulators like the SEC and CFTC would likely move on with crypto rules if the Senate fails to advance the legislation.

The firm pointed to other growth drivers that could also drive growth. The analysts highlighted the adoption of stablecoins for payments, the boom in tokenized real-world assets and blockchain-based capital markets, among others.

Notably, the structure of stablecoin rewards in the bill could be pivotal for USDC, but that has changed the research firm’s outlook. The firm noted that if the CLARITY Act fails, reward programs for stablecoins would stay the same. And if passed, they would shift rewards to user activity.

Cathie Wood is bullish on CRCL too

ARK Invest CEO Cathie Wood also shared her optimism on Circle stock in a recent post on X.  She said the shares have climbed 84% since its IPO, even with its one-year chart showing how choppy public markets can be in the short run. 

She opined that analysts who built their reputations covering payment giants like Visa and Mastercard may find it hard to accurately value Circle, adding that “technology is disrupting the traditional world order.”