Payments technology firm Block, led by Jack Dorsey, is making waves in the crypto mining industry. Analysts believe that Block has the potential to become a strong player in this space, but Wall Street is waiting for more details on profit margins to assess the earnings potential.
Recently, Block signed a significant deal with bitcoin miner Core Scientific to supply its chips for crypto mining. While the deal is estimated to bring in around $225 million to $300 million for Block by J.P. Morgan, more information is needed to fully understand the long-term earnings outlook of this hardware business.
This move marks a significant milestone for Block, formerly known as Square, as it pivots towards focusing on crypto and blockchain technologies. CEO Jack Dorsey, who also founded Twitter, has shown a strong interest in bitcoin, with Block investing a portion of its profits from bitcoin products into the cryptocurrency.
Analysts at Macquarie see the Core Scientific deal as a positive step towards establishing Block as a leader in the crypto hardware industry. They believe that similar deals in the future could further solidify Block’s position in the market.
However, J.P. Morgan cautions that the performance of Block’s stock will be influenced by its other segments, such as Square and Cash App. Despite the potential in the crypto mining industry, Block’s shares have seen a decrease of nearly 17% this year.
Overall, the future of Block in the crypto mining industry looks promising, but more information is needed to fully evaluate its earnings potential. Investors will be closely watching how Block navigates this new venture in the ever-evolving world of cryptocurrencies.