Shares of payment giant Visa (NYSE: V) have been under pressure through much of 2026. By late March, shares had fallen more than 15% on the year. One contributing factor to this is the conflict in Iran. Visa’s payments business finds strength on the back of general economic growth, as it results in more and higher-value transactions.
Surging oil prices have caused economists to lower their global growth forecasts. This includes economists at the International Monetary Fund (IMF). In April, the IMF lowered its global growth forecast for 2026 from 3.3% to 3.1%.
Additionally, fears around artificial intelligence (AI) and agentic commerce have surfaced. Some posit that AI commerce, combined with stablecoins, could upend Visa’s traditional payments model.
However, Visa just delivered earnings that are among its best in recent memory. This led the stock to a large 8.3% post-earnings gain.
The company also provided commentary on AI, positioning it as an opportunity rather than a risk.
Visa Shows Broad-Based Strength in Beat and Raise Report
In its latest quarter, Visa posted revenue of $11.24 billion, good for year-over-year (YOY) growth of 17.1%. This figure handily beat estimates of $10.74 billion and marked the company’s highest net sales growth since 2022. Adjusting for unusual factors, such as the post-COVID recovery and its Visa Europe acquisition, this was the company’s strongest growth since 2013.
Performance impressed across all of Visa’s core metrics. Payments volume rose 9%, with 8% growth in the United States. These were improvements over growth of 8% and 7% in the prior quarter. Cross-border transaction growth, excluding those between European countries, increased by 11%.
The company’s value-added services (VAS) growth was particularly strong, coming in at 27% and accounting for 30% of total revenue. VAS includes offerings that help banks and merchants reduce fraud and operate more efficiently.
Visa’s adjusted earnings per share (EPS) rose by 20% YOY to $3.31, surpassing estimates of $3.10 by a significant margin. With its strong results, Visa raised its top and bottom-line guidance for the full year. It expects low double-digit to low-teens net revenue growth, up from just low double digits before. It projects low-teens adjusted EPS growth, up from its prior guidance of low double digits.
AI and Agentic Commerce: Risk Versus Opportunity
Some fear that AI and agentic commerce could fundamentally disrupt the business of traditional payment networks like Visa. Fees generated on each transaction made through its network, often at 1% to 3% of the transaction value, are the backbone of Visa’s business.
It's possible that AI agents could bypass this, transacting among themselves, using non-traditional payment types like stablecoins. This would cause Visa to lose payment volume, and even if the company participates, the fees Visa can charge may be much smaller. Should agentic commerce reach a massive scale, Visa’s economics could deteriorate meaningfully.
However, in itsearnings call Visa said it believes that these technologies will provide benefits to the company in several ways. This includes accelerating the digitization of commerce, moving more transactions away from cash, and increasing Visa’s market. It noted that third parties estimate that AI will boost global growth by 0.8% to 1.5%, leading to more spending and transactions.
Visa is positioning itself to benefit from AI adoption through its Intelligent Commerce Connect platform, which allows AI agents to connect to its network. Still, the company did not disclose what level of fees this platform charges.
Visa: Analysts Forecast Solid Gains for the Payments Powerhouse
Visa received several strong price targets following its earnings report. The average of updated targets was approximately $395, moderately higher than the MarketBeat consensus price target near $387. This updated average target implies upside in Visa shares of about 20%.
Visa remains the world’s largest payments engine. It is unknown whether AI and agentic commerce will have a net positive or negative effect on its business long-term, despite management’s confidence. In reality, Visa dominates traditional payment channels, and a move away from this is likely a bigger risk than an opportunity.
However, the company is smart not to ignore technological shifts and is hedging its bets by investing in AI. This provides the firm optionality should these emerging transaction channels take off. AI and agentic commerce being a growth niche rather than the new norm would likely be the best outcome for the firm long-term. This is a reasonable reality, but not the only one, considering the pace of AI innovation.
Overall, Visa continues to be in a strong position, but markets will be monitoring how AI causes payment rails to evolve. Notably, the stock trades at a forward price-to-earnings ratio of near 25x, below its average level near 26.5x over the past three years.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
