The significant job cuts related to artificial intelligence at Block, coupled with the company’s utilization of the technology for enhancing user experience, are expected to drive the stock to new heights, as per Citi. With a buy rating on the fintech firm, the bank has raised its price target from $85 to $100, indicating a 43% potential upside from Thursday’s closing price.
Analyst Bryan Keane highlighted that Block is effectively leveraging AI internally, utilizing AI-based solutions like Moneybot for managing and tracking spending, as well as Managerbot to assist owners in business management. This strategic move is projected to sustain mid-to-high teens growth in gross product and boost margins.
Block’s shares have surged by 33% in the past three months due to its increased adoption of AI. The momentum accelerated in late February when CEO Jack Dorsey announced layoffs of up to 24% of the workforce to automate operations with AI.
The company is expected to reap financial benefits from its AI initiatives, which will contribute to sustaining and expanding Cash App growth and scaling business operations. The technology underpins Goose, an open-source AI agent framework for connecting language models to software tasks, and Builderbot, an internal AI tool for coding tasks.
Citi’s outlook aligns with the consensus among Wall Street analysts, with 37 out of 45 analysts recommending a buy or strong buy rating for Block’s stock.
