New York, March 2, 2026, 08:16 (EST) — Premarket
Block (NYSE: XYZ) dropped 3.3% to $61.57 ahead of the bell Monday, cooling off after it jumped 16.8% the day before on unusually high trading volume.
The shift is drawing attention as the stock searches for footing following last week’s sharp selloff. Some traders who jumped in on the move are weighing their options—was this just a spot to lock in some fast gains, or are we seeing the first signs of a lasting trend?
On a morning marked by nerves in risk assets, higher-beta names like Block are often the first to get cut. The narrative here remains straightforward: hefty savings pledged, major execution doubts hang overhead, and the market isn’t exactly waiting around.
Last week, the payments company announced plans to slash over 4,000 jobs—close to half its staff—as it moves to roll out artificial intelligence tools throughout its business. Block turned in a higher adjusted profit for the fourth quarter and is looking for first-quarter gross profit to hit $2.80 billion. The company also lifted its 2026 gross profit growth forecast, bumping it to 18% from the previous 17%.
Opinions diverged among analysts. Evercore ISI described the cuts as “a seminal moment” for the AI era. Brett Horn at Morningstar cautioned that “the long-term impact … is uncertain,” despite possible short-term margin gains. Reuters
Morgan Stanley bumped Block up to “Overweight” and slapped a $93 target on the stock, citing a growing total addressable market and what the firm called AI-fueled potential for stronger profits. Analysts raised their earnings forecasts as well, flagging better momentum in Seller and steady gains in Cash App’s credit offerings. Investing.com
The risk? Not hard to picture. Big cuts risk derailing product plans, bogging down support and sales, and drawing sharper scrutiny from regulators and major merchants — even if, on paper, the numbers improve temporarily.
Defensive sentiment dominated, with U.S. stock index futures dropping over 1% on Monday. Investors faced renewed jitters about a protracted Middle East conflict and the inflationary pressures that come with rising energy prices.
Jack Dorsey, the chief executive, insists the restructuring isn’t about trouble—it’s about agility. “A significantly smaller team using the tools can do more and do it better,” Dorsey said, pushing back on any sense of urgency and instead pointing to industry lag. “Most companies are late” to the AI transition, he argued. Reuters
Investors are waiting to hear details on the margin bridge and timeline when Block takes the stage at the Morgan Stanley Technology, Media & Telecom Conference on March 3, per the company’s investor calendar.
