Visa shares surged 6% Friday after Bank of America upgraded the stock to "Buy" with a $382 price target. The catalyst wasn't traditional payments growth—it was stablecoins. The upgrade highlights a strategic pivot that could reshape how investors think about the payments giant.

The Upgrade

Bank of America analyst Mihir Bhatia cited several factors in his upgrade from Neutral:

  • Valuation: Visa trades near a 10-year low relative to earnings—unusual for a company with its market position
  • Fundamental strength: Transaction volumes remain healthy; cross-border travel continues recovering
  • Stablecoin upside: Visa's crypto integration strategy creates growth optionality not reflected in the stock price

The stablecoin angle is what caught the market's attention. For years, crypto bulls have argued that blockchain-based payments would disrupt Visa's network. Bank of America is arguing the opposite: Visa is positioning to benefit from stablecoin growth, not be disrupted by it.

Visa's "Build, Not Battle" Strategy

Rather than fighting cryptocurrency, Visa has adopted what executives call a "build, not battle" approach—integrating stablecoins into existing infrastructure rather than competing against them.

Two pilot programs are live:

Cross-border settlement: Banks and remittance companies can pre-fund international payouts using stablecoins, improving liquidity management and reducing settlement times from days to minutes.

Direct wallet payouts: U.S. businesses can send payments directly to stablecoin wallets, starting with USD-backed tokens like USDC. This opens Visa's network to crypto-native businesses and gig economy platforms.

The strategic logic: stablecoins aren't replacing Visa—they're another rail on Visa's network. Every stablecoin transaction that touches Visa's infrastructure generates fees, just like card transactions.

The GENIUS Act Catalyst

Visa's stablecoin strategy got a major regulatory boost from the GENIUS Act, passed in July 2025. The federal law provides clear guidelines for stablecoin payments, removing legal uncertainty that had kept major financial institutions on the sidelines.

With regulatory clarity, Visa can scale its stablecoin initiatives without fear of enforcement action. Bank of America's upgrade explicitly cited the regulatory tailwind as a factor in the bullish thesis.

Recent Partnerships

Visa's crypto integration is accelerating:

Circle partnership: Visa is working with Circle (issuer of USDC) to enable stablecoin settlements across its network.

Vietnam pilot: On December 4, Visa, Circle, and Pismo launched Vietnam's first AI-powered PayLater card, combining credit, AI personalization, and stablecoin infrastructure.

Visa Direct expansion: The real-time payment network now supports stablecoin transactions, bringing crypto into Visa's fastest-growing segment.

Why Stablecoins Matter for Visa

The stablecoin opportunity is larger than most investors realize:

B2B payments: Cross-border business payments total roughly $150 trillion annually. Stablecoins offer faster, cheaper settlement than traditional correspondent banking. Visa capturing even a small slice represents billions in revenue.

Emerging markets: In countries with unstable currencies, dollar-backed stablecoins serve as practical alternatives. Visa's network can facilitate these flows.

Crypto-to-fiat bridge: Most crypto users eventually convert to traditional currency. Visa's cards and infrastructure make that conversion seamless—and generate fees.

The Bear Case

Not everyone is convinced:

Regulatory risk: Stablecoin regulations could change. What the GENIUS Act permits, future legislation could restrict.

Competition: Mastercard, PayPal, and crypto-native companies are pursuing similar strategies. Visa's success isn't guaranteed.

Cannibalization: If stablecoin payments become dominant, traditional card revenue could suffer. Visa might be enabling its own disruption.

Crypto volatility: Association with cryptocurrency—even stablecoins—carries reputational and operational risks.

Valuation Check

At $345 per share following Friday's surge, Visa trades at roughly 27x forward earnings. That's below its five-year average of 30x—unusual for a company with:

  • Near-monopoly position in card payments (alongside Mastercard)
  • 60%+ operating margins
  • Consistent double-digit earnings growth
  • New growth vectors in stablecoins and crypto

Bank of America's $382 target implies 11% upside from current levels. UBS's $425 target suggests even more room if the stablecoin thesis plays out.

The Bottom Line

Visa's 6% surge Friday reflects a market awakening to an underappreciated growth driver. The company isn't being disrupted by crypto—it's integrating crypto into its network and charging fees for the privilege.

Whether stablecoins become a major transaction category remains uncertain. But Visa's positioning ensures the company benefits from crypto growth rather than being threatened by it. For a stock trading at a relative discount, that optionality is valuable.

Bank of America's upgrade may have been the catalyst, but Visa's stablecoin strategy has been building for years. Investors are finally paying attention.