Just as the market was still viewing Circle through the traditional fintech valuation framework, this "first stock of stablecoins" refreshed people's perceptions with a financial report substantial enough to attract the attention of Wall Street. On February 26 local time, Circle Internet Group (NYSE: CRCL) saw its stock price rise above $90, hitting a new high for the year, and ultimately closing up over 35%.
This astonishing surge in stock price was not unexpected; it was driven not only by better-than-expected performance but also by a grand vision of an AI agency economy gradually unfolding.
1. Explosive Financial Report: The Leap from "Interest Income" to "Real Profit"
● The source of the surge can be traced back to that heavy financial report for the fourth quarter of 2025.
● Data shows that Circle recorded revenue of $770 million during the reporting period, soaring 77% year-over-year, surpassing the market expectation of $747 million and pushing net profit up to $133.4 million, compared to only $4.4 million in the same period last year. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) skyrocketed by 412% to $167 million, with a profit margin of 54%.
● These numbers shocked the market because they proved that Circle is breaking free from its singular reliance on "interest from reserves." In the past, profits for stablecoin issuers largely came from interest income generated by the U.S. Treasury reserves backing USDC, a model that proved extremely fragile in the face of economic cycle fluctuations.
● However, in the fourth quarter, even with a return on reserve assets of only 3.8%, Circle still achieved remarkable profit growth. CFO Jeremy Fox-Geen stated on the earnings call that this reflects the inherent operational leverage in the company’s model — as the circulation of USDC increases, marginal costs are sharply declining.
2. Investment Bank Game: Morgan Stanley Raises Target Price Amid Market Frenzy
● With strong performance support, Wall Street investment banks quickly adjusted their valuation models. Morgan Stanley raised Circle's target price from $66 to $80, although it maintained a "hold" rating, it significantly increased revenue expectations for 2026 to 2028 and raised its earnings-per-share estimate for 2028 from $2.63 to $3.28.
● Analyst David noted that the increase in expectations reflects the rapid growth of "other business income," including the soon-to-scale CPN and StableFX solutions.
● However, the market is evidently more aggressive than Morgan Stanley. The more optimistic Bernstein analysts maintained an "outperform" rating and gave a target price as high as $190, believing that Circle's growth trend is showing "significant characteristics that differ from the cryptocurrency market," with expansion in the infrastructure sector bringing higher margin income.
● This divergence precisely indicates a shift in the market's focus: investors are no longer just concerned about how much USDC has been issued but are also concerned about how much value is created by these dollars in circulation.
3. Singularity Moment: AI Agents Will Become "The Biggest Business Increment"
If the improvement in financial data is the fuse that ignited the stock price, then Circle CEO Jeremy Allaire's grand narrative about AI during the earnings call is the powder keg that ignited the market's imagination.
● “We are entering a world where, in my view, hundreds of billions, even trillions, of AI agents will interact and perform economic functions on the internet.” Allaire's statement at the outset was interpreted by the market as Circle's core strategy for the future. He cited futurist Ray Kurzweil's viewpoint, asserting that the first quarter of 2026 might be the moment of "singularity" launch.
● In Allaire's vision, AI agents will no longer merely be tools for chatting but independent entities with economic behavior. They will need to employ each other, purchase computing power, and pay for data, and this “machine-to-machine” (M2M) economic activity requires a fast, low-cost, programmable medium of exchange. Traditional banking systems cannot support such high-frequency, microtransaction instantaneous trading, while USDC was born for this purpose.
● To seize this initiative, Circle has launched a testnet specifically designed for autonomous agents — Circle Gateway. This feature allows agents to autonomously and programmatically automate cross-chain transactions at a cost of just one-hundredth of a cent, with settlement times of less than a second. This means that future internet traffic will accompany the flow of funds, and Circle is attempting to become the "clearinghouse" of this new world.
4. Ecological Expansion: Cooperation Between Arc Mainnet and Payment Network
● Supporting the dream of an AI agent economy is the underlying infrastructure Circle is building. The testnet for Layer-1 blockchain network Arc has been launched, attracting over 100 traditional financial institutions to participate, with the mainnet expected to officially launch in 2026.
● Allaire described Arc as a "liquidity and distribution center for other asset issuers," where tokenized stocks, funds, or bank deposits can be issued and circulated.
● At the same time, the registered financial institutions in the Circle Payments Network (CPN) increased from 29 in the third quarter to 55, with an annualized transaction volume reaching $5.7 billion, a quarter-over-quarter growth of 68%. This indicates that, aside from the grand narrative of AI, Circle is also solidly advancing in the traditional areas of cross-border settlement and payment.
● The cooperation with the prediction market platform Polymarket has further established USDC as the "default asset" for on-chain transactions and settlements.
5. Regulatory Dividends and Market Risks
● Circle's rise also benefits from an improved macro environment. The stablecoin regulatory legislation signed by President Trump and the advancement of the GENIUS Act provide a clear compliance path for regulated stablecoin issuers. As one of the first companies to obtain a BitLicense in New York, Circle's first-mover advantage in compliance is turning into a competitive barrier.
● Of course, risks still exist. Morgan Stanley also cautiously pointed out in its report that although the outlook is promising, Circle's current gross margin is only 8.67%, and the stock price has already exceeded its $80 target after soaring, indicating that the valuation may be high. Additionally, while the narrative of AI agents is exciting, this market is still in its infancy, and true commercial realization will take time.
Circle's recent surge is not just a victory of financial numbers but also a signal of value reassessment. When Jeremy Allaire deeply binds the company’s fate to the upcoming AI agency economy, the market sees no longer just a simple stablecoin issuer but an "operating system" striving to define the future rules of the digital economy.
Every jump of the stock price above $90 is a pre-vote for that world of "hundreds of billions of AI agents". In this gamble about the future, Circle has revealed its bottom line — making USDC the currency of machines.
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