Block (SQ)

The sleeper story is Square's enterprise penetration accelerating just as they're building vertical AI moats - large sellers growing 20% YoY while field sales scales with healthy unit economics. Everyone will focus on Cash App's 58M MAU disclosure, but the real story is primary banking actives hitting 8.7M with $250+ ARPU (3x the blended rate) creating a flywheel that competitors can't replicate. The binding constraint isn't demand or competition - it's sales capacity and credit underwriting speed as they scale from 100 to potentially 1000+ field reps while tripling Borrow originations. Owen nailed it: 'We have a 30% return on invested capital for Borrow. I've looked all over the place. I haven't been able to find a lending product that has a return profile that looks like that.' My view changes if Square's processing flexibility costs don't deliver measurable operational advantages by mid-2026, or if banking ARPU growth stalls as they expand beyond their core demographic.