Block Has 45% Upside, JPMorgan Says. Jack Dorsey's New AI Business Could Be the Wild Card

Jack Dorsey wants Block, Inc. (NYSE:XYZ) to become more than a payments company. The fintech is now taking the AI tools it built to run its own operations and preparing to sell them to other businesses, opening a potentially new revenue stream. JPMorgan sees nearly 45% upside in the stock, with this AI experiment adding an intriguing new dimension to its investment case.

Dorsey Wants to Sell Block’s AI Playbook

Block, which operates Square and Cash App, introduced Builderlab as an ecosystem to bring together its internally developed AI tools and make them available to businesses outside the company.

The initiative builds on Buzz, an AI-powered workspace that combines collaboration, communication and software development tools. Block says it is designed to help businesses coordinate AI agents and connect existing tools, potentially reducing their dependence on third-party platforms.

CEO Jack Dorsey said in the company’s third-quarter shareholder letter that Block was its first Builderlab customer, but the problems it was solving were not unique.

Block began piloting Buzz with prospective customers in October and expects to generate its first machine-intelligence revenue in the fourth quarter. It will formally introduce Builderlab at a San Francisco event on Nov. 10.

JPMorgan analyst Tien-tsin Huang sees the initiative as an additional opportunity for Block, describing the commercialization of its internal AI tools as a potential “call option” on the stock.

However, the analyst cautioned that it is too early to call Builderlab the next Cash App.

Cash App and Square Still Drive the Bull Case

The AI opportunity comes on top of improving fundamentals across Block’s existing businesses.

Third-quarter gross profit increased 22% year over year to $3.24 billion, beating JPMorgan’s estimate of 18% growth. Cash App gross profit climbed 27% to $2.07 billion, while Square grew 14% to $1.16 billion.

The company also raised its 2026 gross profit growth outlook to 22% from 21%. Its preliminary 2027 outlook calls for 15% gross profit growth and a 32% adjusted operating income margin.

JPMorgan expects those targets to translate into approximately 55% incremental margins, meaning a substantial portion of additional gross profit could flow through to operating profit.

Why JPMorgan Sees 45% Upside

JPMorgan reiterated its Overweight rating and $110 price target, compared with Block’s Nov. 3 closing price of $76. That implies approximately 44.7% upside through December 2027.

The valuation assumes roughly 16 times estimated 2028 adjusted earnings. That’s below Block’s three-year average forward earnings multiple of approximately 19 times. JPMorgan’s optimism rests primarily on improving Square trends, stronger 2027 guidance and the potential to monetize AI capabilities.

For investors, the Nov. 10 Builderlab event is the next important milestone. Block has yet to establish a meaningful external customer base or demonstrate how large AI revenue could become.

Whether Dorsey can turn an internal productivity advantage into a commercially viable business may determine how much additional value this new venture can ultimately bring to the stock.

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