Morgan Stanley upgraded Block Inc to Overweight, citing accelerating growth and a significantly expanded total addressable market (TAM). The brokerage set a $93 price target, viewing the payments company's strategic moves as justifying a higher valuation. Block's TAM expansion stems from product improvements, new offerings, and flexible pricing, which have attracted larger merchants and boosted take-up of additional services.

These initiatives have demonstrably improved growth rates, with gross profit rising 24% in Q4 2025. This recovery follows a period of slower growth (18% in 2024 vs. 36% in 2022) attributed to higher pricing limiting market reach. Analysts also noted stronger performance across key metrics: Cash App gross profit surged 33% in Q4, monthly active users grew to 59 million, and Cash App Borrow originations skyrocketed 223% year-over-year.

Block's plan to cut headcount by ~40% to ~6,000 employees aims to replace human labor with computing power. Morgan Stanley's $93 target, based on 18x 2027 adjusted EPS, appears conservative given expected revenue acceleration and about 26% EPS growth in 2027. Analysts raised their 2026 EPS estimate to $3.81 and 2027 forecast to $5.19, citing stronger top-line growth and AI-driven profitability potential.