Jack Dorsey’s mainstream dream faces test as Block joins S&P 500

For a company that helped pioneer mobile payments, the real test now is turning big ambitions into profit-driving execution: converting Cash App’s large user base into full-fledged banking  customers, scaling Square’s product arsenal, and competing in the cutthroat world of Bitcoin mining.

The index inclusion delivers immediate inflows from passive funds and renewed investor attention. Block shares rose 7% the Monday following the announcement, softening the stock’s 22% decline in the first half of the year amid concern over the Oakland-based firm’s earnings trajectory. Block shares hovered around $79 during Wednesday morning trading. Analysts caution that index inclusion won’t shield the company from pressure to deliver results in order to realize a stock valuation that’s consistent with growth-minded tech companies. 

“The addition of Block shares to the S&P 500 was very helpful to the company from a timing perspective,” said Mark Palmer, senior analyst at The Benchmark Company, who has a hold rating on the stock. “But whether that initial boost will be sustained is going to depend on whether the company follows through from an execution standpoint.”

Sell-side sentiment remains broadly positive, but concerns persist over whether its core businesses can continue scaling. Cash App, which has 57 million active users, is transitioning from a peer-to-peer payments app into a full-service banking platform. With its banking push, Cash App is competing directly with PayPal Holdings Inc.’s Venmo and digital-first challengers like Chime Financial Inc. The focus now is less on user growth than monetizing the existing customer base through services like lending.

A representative for Block declined to comment.

Square—Block’s original business focused on payments for small and medium-sized businesses—is working to move upmarket, facing competition from Fiserv Inc.’s Clover and restaurant-focused rival Toast Inc. On the crypto front, Block is helping Square businesses accept payments in Bitcoin, offering a self-custody wallet called Bitkey and entering a hardware market long dominated by China’s Bitmain with Proto, its suite of Bitcoin mining products and services. 

“We’re really focused on the fundamentals and the turnaround story there with their two major segments, more than a quick trading pop here for the inclusion,” said Adam Frisch, senior managing director at Evercore ISI, who has an outperform rating with an $85 price target, versus $79 at the Tuesday close. He added that Cash App users generate about $110 average revenue per active member, compared to roughly $245 per user at Chime. “That delta represents a huge opportunity for Cash App.”

Attention is also returning to a Bitcoin vision Dorsey committed to years ago—one that markets largely ignored, but that may be in position to gain overdue validation. Block began accumulating Bitcoin in 2020 and now holds 8,584 coins in its corporate treasury, worth more than $1 billion in today’s prices. It redirects 10% of the gross profit from its Bitcoin products each month to buy more of the cryptocurrency for its balance sheet—a treasury policy more common to crypto startups than publicly listed companies. 

“Jack is the ultimate maxi but they haven’t gotten the multiple for him being such an early bird,” said Dan Dolev, senior analyst at Mizuho Securities. “He’s synonymous with Bitcoin and he was one of the first ones to offer fractional Bitcoin purchasing on Cash App.”

That attention may be a matter of when, not if. Bitcoin broke records  last week, drawing new attention from a flurry of crypto-holding firms that now command a sizable premium in the stock market. 

Block’s posture increasingly resembles infrastructure investment rather than speculative exposure. The firm is pushing deeper into hardware with Proto, and it plans to launch its own Bitcoin mining chips and systems in the second half of 2025 as it aims to challenge Chinese incumbents and sell to both industrial and smaller-scale miners. 

“We have a large pipeline of customers, both the very large and also the smaller, more niche ones,” Dorsey said earlier this year at an industry conference. “This is going to be a big market for us and a big part of our company going forward.” 

Yet profitability in mining is notoriously difficult to sustain. As Bitcoin prices rise, network difficulty and energy costs also increase. That dynamic often undercuts returns just as demand peaks, making mining a challenging industry to serve. 

“Unfortunately, there are a great many like-minded investors and that’s been the real trouble from a profitability standpoint,” said Benchmark’s Palmer. 

Dorsey is still building out Bitcoin infrastructure—and pushing ahead on experimental projects like Goose, an open-source AI agent framework. But for now, investor conviction hinges on the core businesses. If Cash App and Square can deliver, markets may then finally reward Block’s Bitcoin strategy, viewing it as strategic vision rather than a speculative side bet.

“Bitcoin, the holdings and the revenue, are somewhat discounted by most investors,” Evercore’s Frisch said. “People are more focused on the core units than the Bitcoin initiatives at this point.”