Block Stock (XYZ) Skyrockets after Announcing Plans to Cut 40% of Workforce

FomoAnxiety · 2026-02-27T03:29:43+00:00

Block XYZ's stock spiked 24% post-announcement of a 40% workforce reduction, despite only meeting Q4 earnings expectations. CEO Jack Dorsey attributed the cuts to AI efficiencies. The company has a promising outlook for Q1 and FY 2026, with strong analyst ratings.

FomoAnxiety

2026-02-27 03:29:43

Abstract generation in progress

Block XYZ +4.99% ▲ stock surged about 24% in after-hours trading on Thursday after the payments technology company announced plans to cut roughly 40% of its workforce. At the same time, the move comes even though fourth-quarter earnings only met Wall Street expectations, which shows how strongly investors reacted to the restructuring itself. CEO Jack Dorsey said that the company will reduce headcount from more than 10,000 employees to just under 6,000.

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Unsurprisingly, he attributed the drastic change largely to artificial intelligence by explaining that new “intelligence tools” allow smaller teams to operate more efficiently and accomplish more work than larger organizations could in the past.

Meanwhile, fourth-quarter adjusted earnings per share came in at $0.65, while gross profit rose to $2.87 billion. This was due to the strong growth of the Cash App ecosystem, which increased by 33% year-over-year. However, gross payment volume of $66.9 billion fell slightly short of forecasts, and operating expenses climbed to $2.30 billion. Even so, adjusted EBITDA improved to $930 million.

Guidance

Looking ahead, Block issued a strong outlook for both the first quarter and Fiscal Year 2026.

For Q1, the company expects gross profit of about $2.80 billion, above analyst estimates of $2.72 billion, along with adjusted operating income of roughly $600 million, also exceeding expectations.

For the full year, Block projects gross profit of approximately $12.20 billion and adjusted operating income of $3.20 billion, both ahead of Wall Street consensus forecasts.

Is XYZ Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on XYZ stock based on 23 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average XYZ price target of $85.08 per share implies 56% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.

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