Can Block (SQ) Hit $100 With AI Innovative and Bitcoin Nearing $100K?

In the latest quarter, $Block(SQ)$ reported a revenue growth of 6% year-over-year, with non-GAAP net income increasing by 76%. Despite these growth metrics, revenue fell short of analyst projections, and profitability measures met but did not exceed estimates, prompting an initial decline in investor sentiment.

The week following Block's third-quarter report, the stock price actually decrease by 2.8%, this reflect investor reaction despite generally positive analyst evaluations.

But if we looked at how Block’s revenue growth stacked up against its competitors, we are seeing that Block is actually doing well positively, so the concerns from investors might be unfound.

Block (SQ) Provide The Start Of A Small Rally The Week After

Analysts maintain a positive outlook for Block (SQ) regardless of the challenges presented in the latest earnings.

Piper Sandler's Arvind Ramnani have assigned an "overweight" rating, setting a price target of $83, citing Block's strategic expansion into new markets along with the potential growth of Square Payments and Cash App. Bernstein SocGen's Harshita Rawat continues to support her "outperform" rating with a $90 target, while Canaccord Genuity's Joseph Vafi has increased his price target by $25 to $120, sustaining a "buy" position.

So as we can see from the price target movement, we can see that analysts were quite cautious in their initial price target estimates, as we see more and more upside from the crypto market, we can see how Block's involvement in the cryptocurrency market, particularly through its Bitcoin services, adds another layer of interest.

Block’s Bitcoin Services Benefiting From Bitcoin Ongoing Rally?

The recent rise in $CME Bitcoin - main 2411(BTCmain)$ 's value, driven by favorable economic conditions and political climate, further enhances Block's (SQ) attractiveness to investors.

From a valuation perspective, Block's current stock price is $92.70 (as of Thursday (21 Nov) close. The stock's GF Value suggests it is "Modestly Overvalued," with a calculated GF Value of $78.34, indicating the market has already priced future growth prospects accurately.

But if we looked at how Block stock price have moved in tandem with Bitcoin price rally,it does have some correlation. We can see that SQ have moved after its earnings as Bitcoin make an upside movement.

And with investors looking for related stocks outside of crypto stocks, this fintech stock might make a good candidate for their Blockchain services.

Block (SQ) Faster AI Innovation Makes It Appealing To Investors

With the technology-driven financial services and cryptocurrency exposure, this makes investors who are into these two areas look at Block (SQ).

On top of that, Block (SQ) would also be able to benefit from the new Trump administrations financial deregulation plans, combined with the interest rate cut cycle.

These factors have created a positive sentiment for fintech companies like Block (SQ), prompting investment banks to raise their ratings for these firms. The strong performance of these stocks fueled a broader rally on Wall Street, pushing the financial sector to new record highs.

Block CEO has highlighted AI’s importance, noting that while many earnings calls mention AI in relation to efficiency, for Block, it has a transformative impact. He stated, "AI is significantly improving our productivity by enhancing the tools we build and making our engineers more efficient." Looking ahead, Dorsey explained that AI will enable Block to innovate faster, correct errors swiftly, and maintain a creative edge. He remarked, "AI allows us to accelerate learning, speed up product launches, fix mistakes quickly, and stay ahead in the market by integrating complex systems creatively."

So if these were to be implemented smoothly, we should be able to see stronger quarterly results moving forward.

Technical Analysis - MACD and Multi-timeframe (MTF)

If we looked at how Block have trade since its latest earnings, it has moved further above the short-term and long-term MA, and since then, we have seen Block trading a decline, but that is not much of a concern as it could be a minor correction.

Because if we looked at MACD, it is still in an upside movement consistently, and MTF is showing a strong upward trend signal, this should give investors confidence in this stock.

Summary

I think Block is one of the stronger fintech stocks to benefit from stronger crypto market and also AI innovation is moving, and Block should be reaping their return on investment (ROI) soon.

And Block utilizes artificial intelligence (AI) to enhance the seller experience, with features like Square Online's themes and AI-generated product descriptions in Square for Retail helping sellers engage customers and automate sales. Block offers generative AI tools that streamline operations, speed up workflows, and save time.

Appreciate if you could share your thoughts in the comment section whether you think Block is poised for better growth as AI development progress and their Blockchain services also reaping benefit from Bitcoin price rally towards $100,000.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.