TLDR
- Mizuho lowered Circle’s price target from $45 to $43 while maintaining its Underperform rating.
- AI assistants could direct USDC holders toward higher-yielding bank accounts, according to the brokerage.
- Analysts project a possible $4 billion to $9 billion decline in USDC circulation.
- Revenue forecasts for 2027 fell as Mizuho estimated up to 20% of reserve income could face pressure.
- Circle shares declined about 7% on Monday ahead of the company’s November 4 earnings report.
Circle Internet Group faces fresh scrutiny from Wall Street after Mizuho cut its stock target, citing the role of artificial intelligence assistants in financial decisions.
On October 26, Mizuho reduced its Circle target to $43 from $45 and kept its Underperform rating. Shares closed at $79.84, down about 7%, placing the target roughly 46% below that price.
AI Assistants Favor Interest-Paying Accounts
Mizuho tested how AI agents, including Muse, advise users holding cash. Its simulations found assistants often preferred interest-paying insured bank accounts over USDC, Circle’s dollar-backed stablecoin.
Some responses pointed to products such as SoFi savings accounts. A SoFi earnings outlook covers expectations for its October 27 report. Mizuho also found that agents recommended other crypto platforms when users requested digital assets. The simulations measure suggestions, not actual transfers of funds away from USDC.
Mizuho Cuts USDC Revenue Estimates
The brokerage said AI advice could reduce USDC circulation by $4 billion to $9 billion over the medium term. Its models place 10% to 20% of Circle’s reserve revenue at risk.
With faster adoption, $7 billion would move into fiat products and $2 billion into higher-yield stablecoins. Mizuho expects this to lower reserve revenue by 18%. It also reduced its 2027 USDC circulation forecast from $108 billion to $101 billion.
Circle Relies on Reserve Income
Circle earns interest on assets held to back USDC. According to Mizuho, this income generated 95.2% of the company’s revenue in the second quarter of 2026. Direct USDC holders do not receive that interest. Canada is also reviewing draft rules that would bar stablecoin interest payments.
Mizuho said Circle’s platform held 17% of USDC in the second quarter, Coinbase held 30%, and other services held 53%.
The analysts lowered their 2027 reserve revenue estimate to $4.1 billion from $4.3 billion. Their adjusted earnings before interest, taxes, depreciation and amortization forecast fell to $603 million from $635 million.
Circle Shares Decline Ahead of Earnings
Circle reported $1.4 billion in revenue during the first half of 2026. The company also said USDC processed more than $36 trillion in onchain transactions during the period.
Separately, Cathie Wood’s ARK purchased 65,615 Circle shares on October 26, according to its latest reported trades, even as the stock declined during Monday’s session.
Circle plans to publish third-quarter results on November 4. The report will provide updated figures on USDC circulation, reserve income and the company’s quarterly financial performance.
