Mizuho Securities reduced its price target on Circle Internet Group to $43 from $45, maintaining an Underperform rating on the stock. The analysts identified AI personal assistant agents as a potential threat to Circle's medium-term revenue growth.
The core concern centers on how AI agents guide users' financial decisions. Research indicates that AI agents such as Muse tend to recommend FDIC-insured bank alternatives over USDC, even when users expressed a preference for digital assets. These agents often highlight higher yields available through traditional banking options.
Mizuho quantified the potential impact, estimating that this shift could reduce USDC market capitalization by $4 billion to $9 billion over the medium term. The firm projects this could translate into a 10% to 20% decline in Circle's reserve revenue.
Reserve revenue represents the interest earned on USDC reserves held by Circle. In the second quarter of 2026, reserve revenue comprised 95.2% of the company's total revenue. Circle reported approximately $1.4 billion in revenue for the first half of 2026.
Following the report, Circle shares declined 3% to 7%, trading around $80 to $83 after the announcement. Mizuho trimmed its EBITDA forecast for Circle in 2027 by approximately 5%.
The analyst firm has maintained a skeptical stance on Circle, previously flagging competitive threats to the stablecoin issuer in July 2026. Circle is scheduled to report third-quarter results on November 4, which will provide updated USDC balance and yield data.
For USDC holders, Mizuho's forecast concerns demand for the stablecoin rather than its reserve backing. Each USDC token remains redeemable regardless of changes in adoption rates.
