10 Best Cash App Stocks to Buy According to Hedge Funds

8. Block Inc. (NYSE:SQ)

Number of Hedge Fund Holders: 64

Block Inc. (NYSE:SQ) was established in 2009 and offers businesses payment services as well as associated services. A person-to-person payment network called Cash App was also introduced by the business. Square processed a little over $200 million in payments in 2023.

Block Inc. (NYSE:SQ) keeps establishing itself as a fintech leader due to its promising growth and solid financial results. The business reported a 19% year-over-year increase in gross profit to $2.25 billion in its most recent Q3 2024 financial release. The Square and Cash App areas both saw strong growth. Significant gains in adjusted operating income and EBITDA helped Block reach its highest quarterly profitability ever, leading to an upward revision of its full-year expectations for these metrics. This shows confidence in its operating plan and implementation.

The Cash App category continues to be a strong performer, with higher engagement and monetization resulting from improved attach rates for financial items like paycheck deposits. In 2025, expansion is anticipated to be further accelerated by investments in growth efforts, especially in go-to-market methods. However, challenges still exist. Cash App’s moderate monthly active user growth, which is expected to end the year at about 57 million, is a reflection of challenges with user acquisition. Block Inc. (NYSE:SQ) places a higher priority on platform health and engagement than on rapid user acquisition, thus this slowdown is partially purposeful. Future operations may also be impacted by regulatory concerns in the banking and fintech industries.

Short-term obstacles include the development of Cash App Borrow and the delays in enjoying the benefits of transaction costs, both of which are now anticipated to fuel growth beginning in 2025. The benefits of new products aren’t fully appreciated yet because their distribution is still in its early phases, like the Cash App Card’s collaboration with Afterpay.

On January 3, 2024, the stock jumped 5% after Raymond James upgraded it to Outperform. The bank set a price objective of $115 above the $91.20 price due to its favorable value.

In 2025, the bank expects Block Inc.’s (NYSE:SQ) seller gross payment volume (GPV) to increase by at least 10%. Raymond James expects the gross profit to continue to grow even if Cash App’s development has slowed.

Stephen Mandel’s Lone Pine Capital was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 7.67 million shares worth $514.92 million as of Q3.