Block Shares Continue on To New 2026 High, with Street Bullish

Block shares (ASX: XYZ) have climbed a further 1.8% to A$115.20 today, as the fintech heavyweight extended a rally that has carried it 17.85% above where it began the year. The outperformance comes against a backdrop of upgraded profit guidance, surging lending volumes, and management’s explicit push into artificial intelligence productivity tools, yet the stock now trades in overbought territory with its 14-period momentum gauge at 77.3, raising questions about how much of the post-earnings optimism is already priced.

Shares Building Momentum

The move appears to reflect continued digestion of Block’s May first-quarter result, which showed gross profit jumping 27 per cent year-on-year to US$2.91 billion and adjusted operating income climbing 56 per cent to US$728 million.

More importantly, the company lifted full-year guidance to US$12.33 billion in gross profit, up 19 per cent, and projected an adjusted operating margin of 27 per cent alongside adjusted earnings per share of US$3.85, a 62 per cent increase. Cash App, the consumer-facing payments and banking platform, delivered 38 per cent gross profit growth compared with 9 per cent for the legacy Square merchant business, underscoring the narrative that Block’s consumer franchise is now the primary growth engine while Square provides stable cash flow.

Beneath the headline numbers, management highlighted around US$852 million in one-off charges tied to a February organisational reset, including restructuring stock-based compensation and legal contingencies. Bullish local research has framed those items as masking a leaner cost base and improved operating leverage, arguing that the underlying profitability inflection is stronger than GAAP figures suggest. Consumer lending originations rose 82 per cent, with Cash App Borrow originations nearly tripling, and lending gross profit climbed 55 per cent at margins near 93 per cent. The company also deployed US$636 million on share buybacks in the quarter, with US$4.7 billion still authorised, reinforcing the capital-return story that has helped support the re-rate.

Artificial intelligence features prominently in the bull thesis. Block has rolled out tools it calls Builderbot and Moneybot to drive internal productivity and reliability, while new Cash App features, including managed accounts for children and Neighborhoods community tools, are seeing early adoption. The combination of AI-driven efficiency, high-margin lending expansion, and sustained transaction-volume growth taps into two of the market’s preferred themes: embedded finance and technology leverage. That thematic tailwind may help explain why the stock has outperformed the S&P/ASX 200 by roughly 16% points through the first half of the year, even as broader fintech valuations have remained volatile.

Yet the rally is not without tension. Director Anthony Eisen has filed multiple notices to sell additional shares under a pre-set trading plan and other restricted stock unit activity, providing a counterpoint to the bullish momentum: insiders are taking money off the table while the stock grinds higher. Those are planned transactions rather than panic exits, but they underscore the valuation debate that continues to divide the Street.

Credit quality remains a pivotal metric. Current delinquency levels sit around 3.16 per cent of Block’s higher-risk lending cohort, below the internal warning line of 3.5 per cent that bullish research has flagged as a key threshold. Any slippage above that mark could flip the narrative from profitable growth to stretched underwriting, particularly if macroeconomic conditions weaken or consumer spending softens. Regulatory oversight of non-cash payment facilities and buy-now-pay-later products also looms as a background overhang, with Australian authorities consulting on tighter frameworks that could constrain product flexibility or impose additional compliance costs.

View From The Street

Price Targets

The consensus price target of AUD 153.28 implies roughly 33 per cent upside from current levels, framing today’s advance as catch-up to Street optimism rather than froth above fair value. That average, however, masks a wide dispersion: some brokers see Block as a compelling growth story trading at low multiples of forward earnings and enterprise value to EBITDA, while others worry that the lending ramp and margin expansion are unsustainable if credit losses tick higher or competition intensifies.

The presence of both strong buys and sells in the mix means the market is still working through the durability of the profit inflection and the appropriate discount for execution and regulatory risk, yet the consensus from here is clear upside.

The Read

Block’s CDIs are trading above their 50-day moving average, which itself sits above the 200-day line, confirming an established medium-term uptrend. The push to a fresh session high on moderate volume of 57,986 shares suggests conviction rather than a speculative spike, yet the RSI at 77.3 signals overbought conditions.

That combination is typical of a stock in the late stages of a strong rally: buyers are still engaged, but the technical setup leaves little room for disappointment. A failure to hold above the 50-day average, or a spike in volume on a down day, would be early signs that profit-taking is beginning to outweigh the post-earnings enthusiasm.

The path forward hinges on whether Block can sustain the margin expansion and lending growth that underpinned the May guidance raise, and whether credit losses remain well-behaved as the loan book scales. The stock’s outperformance relative to the broader market suggests investors are willing to pay up for the Cash App growth story, but the overbought technical setup raises some questions.

Bull Case: