Circle Shares Climb to $90 as Bernstein Sees Divergence From Crypto, Mizuho Cites Polymarket Growth

Circle Internet Group (NYSE: CRCL) shares briefly surpassed $90 on February 26, 2026, reaching their highest level since November 2025, following a fourth-quarter earnings report that exceeded analyst expectations and sparked divergent analyst commentary.

Bernstein reiterated its “outperform” rating with a $190 price target, arguing Circle is showing a “clear divergence from crypto” as infrastructure revenue grows, while Mizuho raised its price target to $90 but maintained a “neutral” stance, citing potential headwinds from future interest rate cuts despite near-term tailwinds from prediction market activity.

Stock Performance and Earnings Context

Circle shares surged approximately 30% on February 25 following the company’s fourth-quarter earnings release, which showed revenue of $770 million, up 77% year-over-year, and net income of $133.4 million, significantly exceeding analyst expectations of $0.16 per share versus $0.43 reported. The stock extended gains in subsequent trading, briefly touching $90 before settling near $87.

The earnings report highlighted USDC circulation reaching $75.3 billion at year-end, a 72% increase from 2024, with onchain transaction volume surging 247% to $11.9 trillion in the fourth quarter alone.

Bernstein: Infrastructure Evolution and Margin Expansion

Bernstein analysts led by Gautam Chhugani published a note on February 26 reiterating their “outperform” rating and $190 price target, implying approximately 129% upside from current levels. The firm characterized Circle’s fourth-quarter results as a “clear divergence from crypto,” arguing the company is evolving from a stablecoin issuer into a core internet infrastructure provider.

Bernstein pointed to several indicators of this transformation:

• Transaction revenue growth, including blockchain rewards from Circle’s role as a super validator on the Canton network

• Increased USDC held directly on Circle’s platform, rising to 17% of total supply in Q4 from 14% in Q3

• Expansion of higher-margin infrastructure products including Arc blockchain, Circle Payments Network, and new “agentic payments” capabilities

The analysts value Circle using a long-term discounted cash flow approach, citing “stablecoin’s potential applications in payments and stablecoin-native financial services.” They noted that Circle expects USDC in circulation to continue compounding at 40% annually and sees other revenue expanding to as much as $170 million in 2026, up from $110 million in 2025.

Bernstein also highlighted technical progress on Arc, Circle’s layer-1 blockchain, which launched its testnet in October 2025 with participation from more than 100 partners. The network has maintained near-100% uptime, achieved 0.5-second finality, and processed 166 million transactions since launch, remaining on track for a 2026 mainnet release.

Mizuho: Polymarket Boost Balanced by Rate Concerns

Mizuho analysts Dan Dolev and Alexander Jenkins raised their price target on Circle to $90 from $77 but maintained a “neutral” rating, offering a more measured assessment of the company’s trajectory.

The firm noted that sentiment has improved in part due to growing activity on prediction markets such as Polymarket, which management cited as a meaningful contributor to recent USDC growth. Mizuho described prediction markets as a “visible, scaled USDC use case,” generating high-velocity transaction flows that support both transaction revenue and reserve balances.

The note also framed “agentic AI” as a longer-term call option on USDC demand, arguing that autonomous software agents could eventually require internet-native money for machine-to-machine transactions, though current volumes remain small and experimental.

However, Mizuho warned that looming interest rate cuts remain a potential headwind, given that reserve income still drives the vast majority of Circle’s revenue. The firm’s analysis suggests that while Circle’s expanding role in infrastructure is starting to contribute incremental, higher-margin revenue, the company remains sensitive to monetary policy shifts that could compress interest income from its USDC backing assets.

Revenue Mix and Growth Outlook

Analyst debate increasingly centers on how diversified Circle’s revenue mix can become as stablecoin usage spreads into prediction markets, cross-border payments, and autonomous commerce applications.

Bernstein acknowledged that approximately 99% of Circle’s revenue remains tied to interest income from reserve holdings, making the company sensitive to declining rates. However, the firm views infrastructure expansion as a multi-year transformation that will gradually shift the revenue composition toward higher-margin, less rate-sensitive sources.

Circle’s guidance for fiscal 2026 includes other revenue between $150 million and $170 million, RLDC margins of 38% to 40%, and adjusted operating expenses of $570 million to $585 million, reflecting management’s confidence in continued USDC adoption despite broader crypto market volatility.

FAQ: Understanding Circle’s Analyst Coverage

Q: Why are Bernstein and Mizuho taking different views on Circle?

A: Bernstein emphasizes Circle’s long-term evolution into fintech infrastructure, citing product expansion, platform metrics, and USDC’s growing role in payments. Mizuho acknowledges near-term catalysts like Polymarket but maintains caution on interest rate sensitivity, noting reserve income still drives the vast majority of revenue.

Q: What is driving Circle’s recent stock performance?

A: The stock surged following fourth-quarter earnings that significantly exceeded expectations, with revenue up 77% and earnings per share of $0.43 versus consensus estimates of $0.16. USDC circulation growth of 72% and increased onchain transaction volume of $11.9 trillion in Q4 reinforced confidence in the company’s growth trajectory.

Q: How does Polymarket affect Circle’s business?

A: Prediction markets like Polymarket generate high-velocity USDC transaction flows, supporting both transaction revenue and reserve balances. Management cited prediction markets as a meaningful contributor to recent USDC growth, and analysts view them as a visible, scaled use case for the stablecoin.

Q: What are the key risks to Circle’s growth outlook?

A: Primary risks include potential interest rate cuts that would reduce reserve income, which currently accounts for the vast majority of revenue; intensifying competition from Tether and traditional financial institutions entering the stablecoin market; and the need to successfully execute on new infrastructure products like Arc and Circle Payments Network to diversify revenue streams.