Circle Stock Falls 7% as Mizuho Flags AI Threat to USDC Stablecoin

TLDR

• Mizuho cut its price target on Circle to $43 from $45 and kept an Underperform rating.
• The bank sees a 10% to 20% medium-term risk to Circle’s reserve revenue from AI agents.
• AI agents may steer USDC holders toward higher-yielding fiat products or other platforms.
• Faster AI adoption could shrink USDC’s market cap by up to $9 billion.
• Circle shares closed down 7% at $79.84 on Monday.

Mizuho has lowered its price target for Circle Internet Group, the company behind the USDC stablecoin. The new target is $43, down from $45.

The bank kept its Underperform rating on the stock. Analysts shared the call in a research report on Monday.

The main concern is the rise of AI personal assistants. “We believe AI personal assistant engines pose a marked risk to Circle’s medium-term revenue,” the analysts wrote.

How AI Agents Could Affect USDC

Mizuho estimated that wider use of AI agents could cut USDC’s market value by $4 billion to $9 billion. That would lower the reserve revenue Circle earns on the assets backing the stablecoin.

The bank put the medium-term risk to reserve revenue at 10% to 20%. It said AI agents may guide USDC holders toward higher-yielding fiat options or other platforms.

Mizuho ran a simulation using AI agents, including one called Muse. The agents tended to recommend moving away from USDC toward FDIC-insured savings accounts, such as those offered by SoFi.

Even when users wanted to stay in crypto, the agents “seem to prefer other platforms” over holding USDC directly with Circle, the report said.

As of the second quarter, about 17% of USDC sat on Circle’s own platform, where holders earn no yield. About 30% was held on Coinbase, and the other 53% was spread across other platforms.

Under a faster AI adoption scenario, Mizuho expects about $7 billion could move into fiat products. Another $2 billion could shift to higher-yielding stablecoins.

Together, those moves would shrink USDC’s market cap by up to $9 billion. Circle’s reserve revenue would fall by 18% in that case.

Mizuho Lowers Its Forecasts

The analysts cut their forecast for average USDC in circulation in 2027 to $101 billion from $108 billion. This assumes wider AI adoption.

That change lowers projected reserve revenue by 5% to $4.1 billion, down from $4.3 billion. The bank also trimmed its adjusted EBITDA forecast by about 5% to $603 million from $635 million.

Earlier this month, Circle reported about $1.4 billion in revenue for the first half of 2026. The company said it kept roughly 7 cents in net profit for every dollar of revenue.

USDC settled more than $36 trillion in onchain transactions during the first half of the year. By June, it made up about 77% of all global stablecoin transaction volume, up from 60% a year earlier, according to an Oct. 16 Circle blog post.

Circle’s shares closed down 7% at $79.84 on Monday. Mizuho’s $43 target implies a 46% drop from that level.

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