Block shares soared 10%: investors believed in the growth of the company's two businesses

Shares of digital payments operator Block soared nearly 10% in the New York premarket as investors reacted to signs of recovery just three months after one of the largest declines in the company's history. The improved full-year outlook and positive momentum in its two core businesses - Square and Cash App - signaled to the market the potential for a turnaround, and most analysts still recommend buying Block shares.

Shares of billionaire Jack Dorsey's fintech company Block - co-founder of Twitter and a longtime bitcoin supporter - rose 9.5 percent in the Aug. 8 premarket after publishing a second-quarter report.

Block fell short of analysts' estimates for adjusted EPS ($0.62 vs. $0.69) and revenue ($6.05 billion vs. $6.31 billion), notes CNBC, referring to LSEG data. But, according to data from MarketWatch, the quotes were supported by a 14% increase in gross profit, which beat Wall Street's consensus forecast of $2.54 billion against expectations of $2.46 billion, a key metric the market is focused on, the publication explains. The company itself, after a weak first quarter, expected gross profit to increase by only 9% in the second quarter;

Block's chief financial officer Amrita Ahuja said that despite a "dynamic competitive environment", the company's business has remained resilient. In addition to gross margin growth, she noted increased business activity and customer engagement in its two core businesses - payment processing system Square and money transfer service Cash App. 

Block also improved its full-year outlook, and as Ahuja emphasized, this reflects not only strong second-quarter results but also expectations for the second half of the year. The company expects gross profit to be $10.17 billion rather than $9.96 billion, and it raised its estimate for adjusted operating profit to $2.03 billion from $1.9 billion.

Gross profit at Square, which sells point-of-sale equipment and provides business software, topped $1 billion, nearly matching analysts' forecasts and 11% ahead of a year ago, reports MarketWatch. Ahuja said Square's business is benefiting from faster new product launches and innovative sales strategies. 

Cash App, which operates a user-to-user payments network and offers banking services, reported a 16% increase in gross profit in the second quarter, it reached $1.5 billion against a Wall Street consensus forecast of $1.44 billion.

Block has been making money from bitcoin transactions for years: the company buys the cryptocurrency through private brokers and resells it to Cash App users at a small markup. In 2025, it also announced the integration of bitcoin payments via the Lightning Network into Square, allowing merchants to accept them with automatic real-time exchanges for fiat currencies, reports Cointelegraph. However, bitcoin revenue fell to $2.14 billion for the quarter from $2.61 billion a year earlier, notes Reuters.

Jack Dorsey, a supporter of cryptocurrencies in general, has been active in promoting blockchain technology and support for bitcoin, seeing them as key elements of financial freedom and decentralization, Cointelegraph highlights. 

Block's shares have lost nearly 10% this year, significantly lagging the broad market. In early May, they crashed immediately by 18.4% in a day after posting weak quarterly financial results and worsening its outlook for the year.  However, the losses were partially offset by the company's inclusion in the S&P 500 index in July. That broadens the shareholder base among both institutional and retail investors, wrote MarketWatch.

A few days before the report, Morgan Stanley rejected a recommendation to buy Block shares, saying investors' expectations of Square and Cash App were overstated and already factored into the value of the securities. The investment bank kept its target price at $73 - it was below the current quotations even before the current rally. 

The majority of Wall Street analysts, according to MarketWatch, recommend Block's stock as a buy - 32 have issued Buy and Overweight ratings. Ten advise holding these securities in a portfolio. And four - consider it necessary to sell them;

This article was AI-translated and verified by a human editor