Bernstein says Circle investors are focusing on wrong risks

Bernstein says Circle investors are focusing on wrong risks

Fri, August 7, 2026 at 1:22 AM GMT+3 2 min read

• CRCL +5.36%
• USDC-USD +0.02%

Research and brokerage firm Bernstein says that investors worried about the Circle Internet Group (NYSE: CRCL) are fixating on the wrong concerns, and that the stablecoin issuer's latest results make the case against the skeptics.

In a note to clients on Aug. 6, analysts led by Gautam Chhugani reiterated Bernstein's Outperform rating and $140 price target on Circle, the company behind the USDC stablecoin, a digital token pegged 1:1 to the U.S. dollar.

The note followed Circle's second-quarter earnings, reported Aug. 5.

Related: Morgan Stanley downgrades Circle, slashes price target by 64%

The two fears Bernstein pushes back on

Bernstein took aim at the two worries weighing on the stock: rising competition among stablecoins, and whether Circle can keep earning income from its reserves as interest rates shift.

Most of Circle's revenue, about 95% last quarter, comes from that reserve income, the interest earned on the assets backing USDC.

The analysts argued those fears underestimate USDC's long-term potential and Circle's edge in distribution, liquidity, and regulatory standing. They also said investors are overlooking future income from transaction fees, partnerships, and Arc, Circle's own blockchain.

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Where Bernstein sees the growth

The firm pointed to several second-quarter developments, including Circle's national trust bank approval, its expanding Circle Payments Network, and the upcoming launch of the Arc public mainnet on Sep. 16.

Arc is set to debut with founding validators including BlackRock, Visa, Mastercard, and ICE.

Bernstein noted management raised its 2026 guidance partly to reflect $180 million in expected Arc token presale revenue, and said potential income from Arc staking and fees is not yet in most forecasts.

Circle's headline numbers were mixed. Revenue rose 7% year over year to $701 million, just below expectations, while adjusted EBITDA of $143 million and earnings of $0.19 per share both beat forecasts.

USDC in circulation ended the quarter at $73.3 billion, down 5% from the prior quarter but up 19% from a year earlier.

The CRCL stock was trading at $64.70 at the time of writing.

Related: Analyst cuts Circle stock price target ahead of earnings

This story was originally published by TheStreet on Aug 6, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.