Block, Inc. (XYZ): A Bull Case Theory

We came across a bullish thesis on Block, Inc. (XYZ) on Daniel Romero’s Substack. In this article, we will summarize the bulls’ thesis on XYZ. Block, Inc. (XYZ)'s share was trading at $58.74 as of 23^rd May. XYZ’s trailing and forward P/E were 14.26 and 16 respectively according to Yahoo Finance.

Block Inc. is undergoing a pivotal transformation, evolving from a high-growth fintech into a vertically integrated ecosystem that bridges commerce, banking, consumer finance, and emerging technologies. At the heart of this shift are Cash App and Square—dominant platforms in their respective markets—now reinforced by a regulated bank, Square Financial Services, enabling more profitable in-house lending. Cash App serves over 57 million monthly users and has become a central financial tool for younger demographics, particularly with the integration of Afterpay.

Meanwhile, Square is pushing deeper into business services, recently launching over 100 new features, including the Square Handheld POS, demonstrating a renewed focus on quality and innovation. Financially, Block is stabilizing, showing 9% YoY revenue growth (ex-Bitcoin), 28% adjusted operating income growth, and improving margins, signaling it is moving from a startup mindset to operating as a scaled platform. The most underappreciated asset may be Tidal, which under Jack Dorsey’s vision could evolve into a “Square for musicians,” integrating payments, royalties, and AI-powered tools for creators.

Block’s AI push is accelerating, with deployment of NVIDIA’s new GB200 systems powering tools across its ecosystem—ranging from AI-assisted website builders and communications to the potential for AI-driven music innovation. Despite recent earnings-driven stock volatility, Block’s ambitions to merge its products into a seamless, high-performance ecosystem—spanning business, consumer, Bitcoin, and AI—make its $36B valuation appear reasonable. If executed well, Block could emerge as a misunderstood giant, delivering durable long-term value by unifying commerce and finance with proprietary infrastructure and cutting-edge technology.

Previously, we have covered Block, Inc. (XYZ) in March 2025, wherein we summarized a bullish thesis by Long-Term Pick on Substack. The author highlighted Block’s strong 2024 growth in profit and cash flow, driven by Square and Cash App, with expectations for continued expansion and margin improvement in 2025. Since our last coverage, the stock is down 6% as of 27^th May.

Block, Inc. (XYZ) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 76 hedge fund portfolios held XYZ at the end of the first quarter which was 81 in the previous quarter. While we acknowledge the risk and potential of XYZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than XYZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.