Circle Internet Group faced fresh scrutiny on Wall Street after Mizuho cut its price target, citing the growing influence of artificial intelligence assistants in everyday financial decisions.

On October 26, the brokerage lowered its price target for Circle to $43 from $45 while maintaining an Underperform rating, a stance that signals expectations of shares trailing the broader market. Shares closed at $79.84, down roughly 7% in Monday's session, leaving the target about 46% below the closing price. The downgrade arrives days before Circle's third-quarter earnings report, scheduled for November 4.

AI Assistants Favor Interest-Paying Bank Accounts

Mizuho tested how AI agents, including Muse, advise users holding cash. Its simulations found that the assistants often preferred interest-paying, insured bank accounts over USDC, Circle's dollar-backed stablecoin. Some responses pointed to products such as SoFi savings accounts, ahead of a SoFi earnings outlook covering expectations for the company's October 27 report. The brokerage also found that agents recommended other crypto platforms when users explicitly asked about digital assets.

Mizuho noted that the simulations measure suggestions, not actual transfers of funds away from USDC. The distinction is notable because the revenue impact Mizuho models depends on holdings actually moving, which its revised estimates attempt to quantify.

Mizuho Cuts USDC Circulation and Revenue Estimates

The brokerage said AI-driven advice could reduce USDC circulation by $4 billion to $9 billion over the medium term, placing 10% to 20% of Circle's reserve revenue at risk. Under a scenario of faster adoption, Mizuho estimates $7 billion would move into fiat products and $2 billion into higher-yield stablecoins, lowering reserve revenue by 18%. The firm also cut its 2027 USDC circulation forecast to $101 billion from $108 billion.

Reserve Income Anchors Circle's Business Model

Circle earns interest on the assets held to back USDC. According to Mizuho, that income generated 95.2% of the company's revenue in the second quarter of 2026. Direct USDC holders do not receive this yield, in contrast to the insured, interest-bearing accounts that the brokerage found assistants recommending. In a parallel regulatory development, Canada is reviewing draft rules that would bar stablecoin interest payments, placing the same question of stablecoin yield before policymakers.

Mizuho also broke down USDC custody in the second quarter: Circle's own platform held 17% of the stablecoin, Coinbase held 30%, and other services held the remaining 53%.

The analysts lowered their 2027 reserve revenue estimate to $4.1 billion from $4.3 billion. Their adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) forecast fell to $603 million from $635 million.

Shares Slide Ahead of November 4 Earnings

Circle reported $1.4 billion in revenue during the first half of 2026. The company also said USDC processed more than $36 trillion in onchain transactions over the period.

In a separate move, Cathie Wood's ARK purchased 65,615 Circle shares on October 26, according to its latest reported trades, even as the stock declined during Monday's session — a buying counterpoint to the brokerage's cautious stance.

Circle plans to publish third-quarter results on November 4. The report will provide updated figures on USDC circulation, reserve income and the company's quarterly financial performance, offering a near-term read on the circulation trends underlying the revised forecasts.