Bernstein has reaffirmed its Outperform rating and $140 price target on Circle Internet Group, pointing to a fresh expansion in USDC supply and rising transaction activity as signs of a new growth phase for the stablecoin issuer.

The $140 target implies roughly 59% upside from Circle’s recent closing price near $88. Shares have advanced about 40% over the past month, including a gain of more than 5% in one recent session.

USDC Supply Turns Higher After Months of Stagnation

According to the research note published Monday, USDC circulation rose by approximately $1.7 billion to $2 billion over the past week. That increase reversed nearly six months of largely flat or declining supply. Bernstein described the shift as the start of “digital dollar reflation.”

While USDC remains the second-largest dollar-backed stablecoin by market capitalization behind Tether’s USDT, the firm noted a sharper rise in usage. USDC’s share of adjusted stablecoin transaction volume climbed from about 40% in 2025 to more than 60% so far in 2026, overtaking USDT on that metric.

Adjusted transaction volume, which excludes certain automated and high-frequency activity, reached roughly $11 trillion in 2025 and was tracking at an annualized pace of about $17 trillion through July 2026. That figure represents an increase of around 60% from the prior year.

Growth Drivers Extend Beyond Trading

Bernstein linked the next phase of expansion to several factors. These include renewed momentum in crypto markets, wider use of stablecoins for payments, development of tokenized capital markets, and early adoption of stablecoins by artificial intelligence agents.

Circle has reported that its Agent Stack platform, launched earlier this year to support programmable payments by software agents, now connects to more than 900 paid services. The company said 99.3% of payment volume under the related x402 protocol settles in USDC.

Institutional infrastructure has also broadened. Circle received final approval from the Office of the Comptroller of the Currency to establish a national trust bank. Additional integrations allow institutional clients of banks and platforms such as Fireblocks to mint, redeem, and settle in USDC across multiple networks.

Regulatory Outcome Not Central to Thesis

The firm stated that its outlook for Circle does not hinge on Congress approving the CLARITY Act during the expected September session. The legislation aims to clarify market structure rules and the division of oversight among federal agencies.

If the Senate does not advance the bill in the scheduled mid-September vote, Bernstein expects the Securities and Exchange Commission and Commodity Futures Trading Commission to move more quickly to provide guidance. The analysts view either path as compatible with continued USDC adoption.

On stablecoin rewards, a point of ongoing debate, Bernstein argued that both the current framework and potential new rules would remain workable for Circle. The firm has previously supported language that limits yield paid solely for holding idle balances.

Financial Context and Competition

Circle went public in June 2025, pricing shares at $31 and raising about $1.1 billion. After an initial rally, the stock retreated toward its IPO level by late 2025 amid broader market pressure on crypto-related equities.

In its most recent quarter, the company reported $701 million in revenue and $48 million in net income, both higher than a year earlier. Earnings per share of $0.18 exceeded consensus estimates even as revenue came in slightly below forecasts.

Bernstein’s constructive stance comes as other models enter the regulated stablecoin space. Alternative structures that share reserve economics with participants have drawn attention from some analysts, who have questioned potential pressure on Circle’s margins.

The research note frames the recent supply rebound and transaction-share gains as evidence that demand for dollar-denominated on-chain settlement is reaccelerating across payments, decentralized finance, tokenized assets, and emerging agent-based activity.