What's behind Block Inc's (ASX: SQ2) share price surge on ASX today?

May 03, 2024 02:20 PM AEST | By Team Kalkine Media

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What's behind Block Inc's (ASX: SQ2) share price surge on ASX today? — Image source: freepik

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Block Inc's (ASX: SQ2) shares experienced a significant surge, climbing as much as 9.8% to AU$116.390 on Friday’s trading hours. This uptick marked the most substantial intraday percentage increase since 23 February, signaling a notable shift in market sentiment towards the company. At this price point, SQ2 reached its highest level since 24 April, firmly establishing itself as the leading gainer in the ASX 200 benchmark index.

The company attributed this surge to its optimistic outlook, with Block Inc anticipating its full-year adjusted core earnings to surpass previous estimates. Initially projected at AU$2.63 billion, the revised forecast now anticipates earnings to reach at least AU$2.76 billion. This upward adjustment in earnings expectations likely contributed to the renewed investor confidence and subsequent rise in share prices.

Moreover, Block Inc disclosed its strategic plan to allocate a portion of its gross profit from bitcoin products towards the purchase of the digital asset itself. Specifically, the company announced its intention to invest 10% of the gross profit generated from bitcoin products each month into acquiring more of the asset class. This decision underscores Block Inc's commitment to leveraging its position within the cryptocurrency market to drive further growth and capitalize on the increasing popularity of digital assets.

Despite this recent surge, Block Inc's stock has faced challenges throughout the year, with a 9.2% decline recorded year-to-date as of the last trading session. However, the significant uptick in share price and the positive outlook provided by the company suggest a potential reversal of this trend and renewed momentum moving forward.

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