Bernstein backs Circle with $190 target as ARC presale reaches $222 million

Bernstein has maintained its Outperform rating on Circle Internet Group with a $190 price target after the company’s $222 million ARC token presale and continued USDC growth helped offset pressure from falling reserve income.

According to a Tuesday client note from Bernstein analysts led by Gautam Chhugani, the brokerage sees Circle’s expanding blockchain and payments business as supporting earnings visibility even as lower interest rates reduced reserve-related revenue during the first quarter.

Circle shares closed at $131.76 on Monday, based on data from Yahoo Finance, leaving Bernstein’s target roughly 44% above the current level.

The analysts said Circle generated $694 million in Q1 revenue and reserve income, up 20% from a year earlier, although the figure came in around 4% below consensus expectations due to weaker reserve income. Adjusted EBITDA reached $151 million, about 10% ahead of analyst estimates, while Circle maintained what Bernstein described as disciplined operating costs.

At the same time, Bernstein pointed to the company’s ARC token presale as an additional revenue contributor after Circle raised $222 million at a $3 billion fully diluted valuation for Arc, its planned Layer 1 blockchain. Earlier disclosures from Circle showed the round included investors such as Andreessen Horowitz, BlackRock, Apollo Global Management, ARK Invest, and Standard Chartered.

USDC supply growth remains central

Within the same note, Bernstein said USDC circulation climbed to $77 billion during the first quarter, rising 28% year over year and 2% from the previous quarter. The brokerage also noted that Circle’s on-platform USDC balances increased to $13.7 billion, representing 18% of the total supply, even while the crypto market had fallen roughly 40% since October 2025.

Circle previously reported that USDC processed $21.5 trillion in on-chain transaction volume during Q1, up 263% from a year earlier. Stablecoin regulation in the U.S. and Europe has also supported adoption after frameworks such as the GENIUS Act and MiCA established clearer rules for issuers.

Elsewhere in the business, Bernstein highlighted growth in Circle’s payments network, which reached nearly $10 billion in annualized transaction volume with 136 financial institutions onboarded as of May 7. Circle has also expanded partnerships with firms including Meta, DoorDash, and Kyriba.

Arc blockchain and AI payment tools gain attention

Ahead of Arc’s planned mainnet rollout later in 2026, Bernstein said the blockchain’s testnet has already processed more than 244 million cumulative transactions and attracted 1.6 million unique wallets.

Circle has described Arc as a blockchain built for institutional finance and stablecoin payments. In earlier comments to CNBC, Circle CEO Jeremy Allaire said the company was “entering the operating system business” through a distributed network model tied to the ARC token.

Bernstein also focused on Arc’s “agentic” infrastructure, particularly the x402 standard for machine-to-machine micropayments. According to the brokerage, USDC currently handles more than 99% of all x402-based agentic payments settled globally.

Recent announcements from Circle have tied those tools to AI-focused payment infrastructure through products such as Circle CLI, Agent Wallets, and Agent Marketplace. Circle has said the services are designed to support USDC payments across blockchains and traditional payment systems for software agents and automated applications.

Meanwhile, Circle’s fiscal 2026 guidance remains unchanged. Bernstein said the company still expects a 40% compound annual growth rate in USDC supply, while projecting non-float revenue between $150 million and $170 million. 

The brokerage added that current guidance does not yet include financial contributions from the ARC token presale, which Circle plans to recognize as other revenue once token delivery takes place.