Block (XYZ) stock slipped on Friday as a broader fintech selloff and investor caution over rising regulatory scrutiny in the digital payment sector weighed on sentiment. The decline pushed XYZ below its 50-day moving average (MA), indicating a shift in near-term momentum from bullish to bearish.
Following recent weakness, Block stock is down some 15% versus its year-to-date high.
Long-term investors should consider loading up on XYZ stock partly because of its radical pivot toward lean operations.
In late February, management announced plans of cutting workforce by a massive 40%, citing AI-driven efficiencies as the catalyst. This restructuring is expected to significantly boost profitability, with experts projecting adjusted diluted earnings per share to soar by 50% this year.
By streamlining the organization, Block is effectively lowering its breakeven point and aiming for a staggering $3.2 billion in adjusted operating income for 2026, representing a 54% year-on-year increase.
What’s also worth mentioning is that XYZ is still holding its 20-day MA, suggesting bulls remain in control in the near term.
Block shares also look attractively priced because the company’s ecosystem — comprising Square and Cash App — remains a growth engine.
Rising Cash App transactions and the launch of high-margin lending products continue to drive double-digit gross profit growth.
Moreover, XYZ is currently trading at less than 30x forward earnings, which isn’t really expensive given it’s a company strongly positioned to benefit from both AI and crypto tailwinds.
A potential recovery in Bitcoin (BTCUSD) price in the coming months will directly boost XYZ’s bottom line by increasing the value of nearly 9,000 BTC on its balance sheet, while simultaneously boosting Cash App’s transaction fees as well.
Investors could also take heart in the fact that Wall Street remains bullish as ever on Block for the remainder of 2026.
According to Barchart, the consensus rating on XYZ shares sits at “Moderate Buy” currently, with the mean price target of about $84 indicating potential upside of about 40% from here.
