Buy Visa Stock on Impressive Q2 Earnings and Strong Business Visibility

The global financial transaction services giant Visa Inc. V reported solid quarterly adjusted earnings of $2.98 per share, beating the Zacks Consensus Estimate of $2.86. This compares to earnings of $2.42 per share a year ago. Quarterly revenues came in at $10.17 billion, surpassing the Zacks Consensus Estimate by 3.11%. Visa benefitted from strong consumer sentiment across its line of business.In the last reported quarter, revenues of all its business segments were better than the Zacks Consensus Estimates. Visa's payments volume increased 8% and processed transactions grew 10%. Total payment volumes were $3,618.00 billion versus the consensus mark of $3,583.74 billion. Total transactions came in at 65.44 billion versus the consensus estimate of 64.47 billion.Business DiversificationsCEO Ryan McInerney said, “Looking ahead, our continued focus on innovation and product development in dynamic areas like AI and stablecoins is helping to shape the future of commerce while delivering sustainable, long-term value for our shareholders.” Visa’s ongoing shift to digital payments is advantageous, with strong domestic volumes supporting its overall performance. V is taking a significant step toward modernizing cross-border money movement. In a move aimed at enhancing the efficiency of global transactions, V is expanding its stablecoin settlement capabilities to the high-performing Solana and Ethereum blockchain. This expansion of V includes collaboration with prominent merchant acquirers Worldpay and Nuvei, marking a pivotal development in the world of digital payments.On July 18, President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) seeking to regulate the stablecoin market of the nation. Stablecoins are digital assets that are built to maintain a stable value relative to a “stable” asset like the US dollar. Various global retail behemoths are considering launching their own stablecoins to reduce dependence on traditional payment networks like plastic money. Emphasis on stablecoins is an effective diversification strategy by Visa to stay ahead of its competitors like Mastercard Inc. MA, PayPal Holdings Inc. PYPL and The Western Union Co. WU.Extensive AI ApplicationsVisa’s expansion in cross-border volumes, rising digital transactions, and investments in artificial intelligence (AI) has significantly enhanced its prospects. V is fueled by continued increases in payments, cross-border volumes and sustained investments in technology, and is witnessing solid profit growth.With fraud cases on the rise and AI adoption increasing, V’s services are in high demand. Visa has embedded AI and generative AI into over 100 products, primarily for fraud prevention and cybersecurity. Visa has invested $3.5 billion in rebuilding its data platform. V’s technology helps prevent $40 billion annually in fraud attempts. Through strategic diversification, innovation, and AI-driven security, Visa is well-positioned for long-term growth.Solid Earnings Estimate Revisions for V StockFor fiscal 2025 (ending September 2025), the Zacks Consensus Estimate currently shows revenues of $39.63 billion, suggesting an improvement of 10.3% year over year and earnings per share of $11.37, indicating an increase of 13.1% year over year. The Zacks Consensus Estimate for the current year has improved 0.1% in the last 30 days.For fiscal 2026 (ending September 2026), the Zacks Consensus Estimate currently shows revenues of $43.88 billion, suggesting an improvement of 10.7% year over year and earnings per share of $12.81, indicating an increase of 12.6% year over year. The Zacks Consensus Estimate for next year has improved 0.4% in the last 30 days.Visa currently has a long-term (3-5 years) EPS growth rate of 13%, above the S&P 500’s long-term EPS growth rate of 12.6%.Image Source: Zacks Investment ResearchAttractive Short-Term Price Upside for V SharesThe short-term average price target of brokerage firms for the stock represents an increase of 11.3% from the last closing price of $351.29. The brokerage target price is currently in the range of $425-$305. This indicates a maximum upside of 21% and a downside of 13.2%.Image Source: Zacks Investment ResearchInvestment Thesis for V SharesYear to date, shares of Visa outperformed the broad-market index — the S&P 500. However, the stock significantly underperformed the S&P 500 in the past three months. Visa currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The recent dip in stock price is a good opportunity to invest in this stock. Visa’s extensive AI thrust and effective business diversification will generate more value in the long term.The chart below shows the price performance of V is the past three months.Image Source: Zacks Investment Research#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report The Western Union Company (WU): Free Stock Analysis Report PayPal Holdings, Inc. (PYPL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks