Mastercard was a casualty of the AI scare trade. This deal could turn it around
Mastercard is acquiring stablecoin infrastructure firm BVNK for $1.8 billion — a long-term play that could transform the one-time casualty of the so-called artificial intelligence and stablecoin disruption trades into a beneficiary of both emerging tech trends. The acquisition will enable Mastercard to process stablecoin-denominated transactions, the payments company said Tuesday in a statement. Over time, the deal could help Mastercard fend against a few disruption risks, and enhance its stock’s upside potential, Hivemind Capital founder and managing partner Matt Zhang told CNBC. “Perception wise, Mastercard can tell the shareholders that this is something [for which] they have a solution. They have a hedge against [AI and stablecoin-related risks],” Zhang said of the deal. “And, on the other side, they also … can benefit from expanding into another adjacent sector.” In late February, Citrini Research said in a note to clients that agentic AI could lead to the redirection of many payments from traditional financial networks to on-chain alternatives. The AI doomsday declaration sparked a sell-off of financial stocks, including Mastercard. Its shares sank about 6% on the trading day following the report’s release. The BVNK deal is expected to close later this year, and likely will mean Mastercard is more equipped to face AI disruption threats, analysts said. “Mastercard continues to embrace new age digital currencies like stablecoins via strategic decisions like the acquisition of BVNK,” Citi analyst Bryan Keane said Tuesday in the note. “MA should be able to take BVNK’s existing send, receive, store, and convert services and scale them alongside the greater Mastercard Move initiative, resulting in an even more comprehensive service package not just for fintechs, but (increasingly) for traditional financial institutions as well.” Citi Research has a buy rating on Mastercard and a $735 price target on shares, or 48% above where the stock closed Friday. Stablecoin surge The deal between Mastercard and BVNK comes as dollar-pegged tokens have risen to a combined value of roughly $307 billion, up about 35% over the past year, according to CoinGecko data. Banks and fintech firms are embracing the digital currencies in a bid to offer near-instant payments for minimal fees. When the Genius Act goes into effect, stablecoin adoption could accelerate further — that’s not lost on traditional payments processors and fintech firms. Last year, Stripe launched its own stablecoin-friendly payments platform called Tempo, while Shopify introduced support for USD Coin payments and Visa rolled out stablecoin settlement in the U.S. “The direction of progress is very obvious, and now the infrastructure has to catch up,” Anthony Pompliano, founder and CEO of Professional Capital Management, said. The investor, who is also the co-founder of finance-focused agentic AI platform Silvia, added that several firms that are embracing stablecoins are also adding support for AI agents to their platforms. “Tempo and Stripe just launched MPP, the machine payment protocol [and] stablecoin providers are obviously all racing to do this as well,” Pompliano said. Zero Knowledge Consulting CEO Austin Campbell said he isn’t convinced that Mastercard needs to hedge against both stablecoin and AI risks. But, there are still plenty of other good reasons for the company to embrace new trends, the long-time tech executive said. “Ignoring the agentic [AI] bulls—, if you look around in the Global South, there’s a lot of stuff kicking off in terms of stablecoin payments and volumes are going up, so you do not want to miss that bus,” said Campbell, who is also a professor at New York University. He added that the company’s deal “came at a pretty good time.” “Genius was passed, but the rules are not going to be implemented until [the] middle of this year,” said Campbell. “But the problem is, we’re talking about a multiyear period of snowballs rolling downhill. So, if you don’t start your snowball rolling, you’ve got a problem.” Mastercard is likely to see a lot of upside from its stablecoin gambit, although those gains could take some time to be realized, he said. “If you are long-term committed, this acquisition came in a very good time,” Campbell said. “If you’re trying to be a short-term tourist, you’re probably walking into a thing where you’re wasting money because the reality is [that] this is a marathon, not a sprint.” Mastercard stock is down about 8% over the past year. Of the 40 analysts covering the stock, 35 have a buy or strong buy rating on shares, according to LSEG, with the average price target predicting shares could rise 33% from current levels.
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