**Block** (formerly Square) reported second-quarter earnings that surpassed Wall Street expectations, with adjusted earnings of $1.02 per share, up 64% year-over-year, and revenue of $6.618 billion, including bitcoin transactions, up 9% from the previous year. Analysts had predicted earnings of 87 cents per share on revenue of $6.474 billion.

Despite the beat, Block stock dipped on Thursday, reflecting mixed investor sentiment.

## Key Financial Metrics

Block's gross profit rose 25% to $3.17 billion, slightly above estimates of $3.062 billion. EBITDA increased 31% to $1.169 billion, beating estimates of $1.078 billion. Gross payment volume from merchants grew 10% to $74.73 billion, versus the expected $73.61 billion.

## Turnaround or Growth Story?

Block's massive restructuring earlier this year, which included cutting its workforce by over 40%, appears to be paying off. JPMorgan analyst Tien-tsin Huang noted, "It's clear to us that the improved momentum at Block is sustaining and that the company's reorganization earlier this year is achieving its intended effect: improved product velocity, which will drive improved growth at better profitability as the firm orients to being an intelligence company."

Evercore ISI analyst Adam Frisch added, "Q2 was another proof point that Block has graduated from a turnaround to a growth story with encouraging visibility that the current trends can continue for the foreseeable future via Square and Cash App growth, new products, market expansion and AI initiatives."

For the current quarter, Block forecasts gross profit of $3.13 billion, in line with estimates. The company also raised its FY26 gross profit guidance, signaling confidence in sustained growth.

## Stock Performance and Technicals

Square stock dipped 1.5% to near $83 in early trading, despite being up about 30% in 2026. The stock holds an IBD Composite Rating of 92 out of 99 and an Accumulation/Distribution Rating of A+, indicating strong institutional buying.

## Core Businesses and Innovations

Block operates a two-sided digital payments ecosystem, with products for merchants and consumers. The Cash App allows individuals to manage money, buy stocks, and cryptocurrency, and recently added a pooled payments feature for group splitting.

Block stock fell amid Q2 earnings and revenue that topped consensus estimates while profit guidance met expectations.

Block's Q2 Earnings Beat: Is This the Start of a Major Turnaround?

In a significant development, researchers at the Chinese Academy of Sciences' Shanghai Institute of Optics and Fine Mechanics have made a major stride in EUV lithography, a technology critical for advanced chip manufacturing. Their laser-produced plasma EUV light-source platform achieved a **3.42% conversion efficiency** in March 2025, a key metric that narrows the gap with industry leader ASML.

This breakthrough comes amid ongoing export controls that have barred China from purchasing ASML's most advanced EUV tools since 2019. The research, led by former ASML scientist Lin Nan, demonstrates China's determination to achieve self-sufficiency in chipmaking technology.

While the lab results are promising, the power output remains at 100-150 watts, far below ASML's commercial benchmark of 600 watts. This gap highlights the challenge of transitioning from prototype to production-ready systems, as higher power enables greater wafer throughput and economic viability.

In parallel, Alibaba is making waves in the AI software space. At the World AI Conference in Shanghai, the company previewed its **Qwen3.8-Max-Preview**, a multimodal model with a staggering **2.4 trillion parameters** using a sparse Mixture-of-Experts design. Additionally, T-Head, Alibaba's chip unit, announced it would open-source its SAIL software stack, positioning it as an alternative to Nvidia's CUDA ecosystem.

These developments underscore China's multi-pronged strategy to reduce dependence on Western technology, from hardware to software. The EUV progress, while still in early stages, signals a potential shift in the global semiconductor landscape, with implications for supply chains and geopolitical dynamics.

As China pushes toward its goal of producing advanced chips on entirely domestic machines by 2028, the world watches closely. The combination of hardware breakthroughs and software innovation could reshape the competitive landscape, challenging the dominance of established players like ASML and Nvidia.

China advances EUV chipmaking as Alibaba expands AI ambitions, challenging ASML's dominance and Nvidia's software ecosystem.

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