Mizuho cuts Circle target, warns AI agents could pressure USDC revenue

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Mizuho cuts Circle USDC target

Highlights

Mizuho cut Circle Internet Group's price target to $43 from $45, maintaining Underperform, citing AI agent risks to medium-term USDC revenue.
Broader AI adoption could shrink USDC market capitalization by $4–$9 billion, potentially reducing Circle's reserve revenue by up to 18%.
Mizuho lowered 2027 USDC circulation forecast to $101 billion from $108 billion, causing reserve revenue and adjusted EBITDA projections to drop 5% each.

Brokerage outlook and downside scenarios

According to The Block, Mizuho said in a Monday research report that it cut its price target on Circle Internet Group to $43 from $45 while maintaining an Underperform rating on the stock.

The analysts said AI personal assistant engines pose a marked risk to Circle's medium-term revenue, estimating broader AI agent adoption could reduce USDC market capitalization by $4 billion to $9 billion. They said that would weigh on reserve revenue as agents steer holders toward higher-yielding fiat alternatives or other platforms.

Mizuho's simulation suggested AI agents, including Muse, are likely to recommend moving away from USDC in favor of FDIC-insured fiat options such as savings accounts offered by SoFi. The report added that even when users want to remain in crypto, the agents seem to prefer other platforms over holding USDC directly within Circle's ecosystem.

Under a faster AI adoption scenario, Mizuho projected about $7 billion could move into fiat products and another $2 billion into higher-yielding stablecoins. In that case, USDC's market cap could shrink by as much as $9 billion and Circle's reserve revenue could fall by 18%.

USDC exposure and broader stablecoin context

According to the report, about 17% of USDC is held on Circle's platform as of the second quarter of this year, where holders earn no yield, while 30% is held on Coinbase and the remaining 53% on other platforms.

The analysts also lowered their forecast for average USDC in circulation in 2027 to $101 billion from $108 billion under wider AI adoption. That reduced their projected reserve revenue by 5% to $4.1 billion from $4.3 billion, while their adjusted EBITDA forecast fell by about 5% to $603 million from $635 million.

Circle's shares closed down 7% at $79.84 on Monday, and Mizuho's revised price target implies 46% downside from that level. Earlier this month, Circle reported roughly $1.4 billion in revenue in the first half of 2026 and said it retained about 7 cents in net profit for every dollar of revenue.

During the first half of 2026, USDC settled more than $36 trillion in onchain transaction volume. Circle said in an Oct. 16 blog post that USDC accounted for about 77% of global stablecoin transaction volume by June, up from 60% a year earlier.

In our earlier article on AI agents’ adoption among large U.S. companies, we highlighted survey findings showing many CEOs are seeing efficiency and growth benefits, even if few yet view the technology as truly transformational. The piece also noted that executives are pairing AI rollouts with continued investment, retraining, and hiring—signaling that agentic AI is moving steadily closer to core workflows and bringing new risk considerations for financial firms.

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