Mizuho cut its price target for Circle shares to $43, warning that AI assistants could steer USDC users toward higher-yield options.
In an October 26 report cited by The Block, analysts lowered their price target for Circle, the issuer of USDC, to $43 from $45 while maintaining their “Underperform” rating, which signals an expectation that the stock will underperform the market.
Circle shares closed Monday down 7% at $79.84. Mizuho’s new target is about 46% below that closing price. The key risk highlighted by analysts is that AI assistants could change users’ preferences about where to keep their money.
Where Could AI Steer USDC Users?
According to Mizuho’s simulation, AI assistants such as Muse could recommend higher-yield options covered by deposit insurance, such as SoFi savings accounts, instead of holding USDC. Even when users want to remain in crypto, assistants could favor other platforms rather than having users hold USDC directly on Circle’s platform.
The report said that, as of the second quarter, 17% of USDC was on Circle’s non-yield-bearing platform, 30% was on Coinbase, and 53% was on other platforms. Mizuho sees the wider adoption of AI posing a risk of a $4 billion to $9 billion contraction in USDC’s market value and a 10% to 20% medium-term decline in Circle’s reserve income.
$9 Billion Shift in a Rapid-Adoption Scenario
In a scenario where AI is adopted more rapidly, analysts estimate that about $7 billion could shift to products backed by traditional currencies, while $2 billion could move to higher-yield stablecoins. This scenario could shrink USDC’s market value by as much as $9 billion and reduce Circle’s reserve income by 18%.
In light of these expectations, Mizuho lowered its forecast for the average amount of USDC in circulation in 2027 to $101 billion from $108 billion. Its reserve income forecast was cut to $4,1 billion from $4,3 billion, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate was lowered to $603 million from $635 million.
Circle’s Transaction Volume Grows as Its Revenue Model Faces Scrutiny
Circle had reported that it generated about $1,4 billion in revenue in the first half of 2026 and earned about 7 cents in net profit for every dollar of revenue. During the same period, the volume of on-chain transactions conducted with USDC exceeded $36 trillion.
According to the company’s October 16 statement, USDC’s share of global stablecoin transaction volume reached about 77% in June, up from 60% a year earlier. Alongside growing usage, Mizuho’s warning focuses on how users’ pursuit of yield could affect the company’s revenue.
Not investment advice.