Bernstein reiterates optimism for Circle: Q2 performance alleviates concerns about stablecoin competition, maintains target price of $140

According to The Block, research firm Bernstein reaffirmed its "Outperform" rating and maintained a target price of $140 after Circle announced its Q2 2026 financial report, believing that the company's latest performance constitutes a "reverse validation" of the market's bearish views. Bernstein analysts stated that the market currently underestimates USDC's long-term growth potential and Circle's advantages in distribution channels, liquidity, and regulatory compliance, due to two major core concerns regarding Circle—intensified competition in stablecoins and changes in the interest rate environment that may affect reserve income.

Investors may not have fully accounted for the future revenue opportunities from transaction fees, partner ecosystems, and the Arc blockchain that Circle will bring. The firm specifically pointed out that several infrastructure initiatives recently advanced by Circle, including obtaining a national trust bank license in the U.S., expanding the Circle Payments Network, and the planned launch of the Arc public chain mainnet on September 16, could all become future growth drivers. Additionally, Bernstein noted that Circle has raised its guidance for other revenues and profit margins after deducting distribution costs for 2026, expecting to confirm approximately $180 million in Arc token presale revenue.

Analysts believe that future staking yields, gas fees, and ecosystem partnership revenues from Arc have not been fully reflected in the current valuation expectations. As of the end of Q2, the circulating supply of USDC was $73.3 billion, a 5% decrease from the previous quarter but a 19% increase year-over-year. Bernstein believes that Circle is transitioning from a purely crypto trading infrastructure to payments, real-world asset (RWA) tokenization, and broader financial infrastructure, which will drive USDC into the next phase of growth. Circle's stock closed at $63.28 on Wednesday, and Bernstein's target price of $140 implies a potential upside of approximately 121%.