Visa Hits a Record High as Resilient Spending and Stablecoin Cards Fuel Its Growth Story

Visa (V) extended its rally to record highs on Monday, Oct. 12, with the stock up 1.13% at $389.83 (+$4.37) as of 3:46 PM ET. Shares have gained roughly 9% since the end of September as investors bet that resilient consumer spending and the growth of digital payments will keep the payments giant's earnings climbing. The next test comes Oct. 27, when Visa reports fiscal fourth-quarter results.

The last quarter: solid across the board

Visa's fiscal third quarter, which ended June 30 and was reported on July 28, gave the rally its operating backing. Net revenue rose 14% to $11.6 billion and adjusted earnings per share rose 11% to $3.32.

Figures are from Visa's earnings release filed with the SEC.

Why investors are buying

Spending has held up. Payments volume and processed transactions each grew 10%, and cross-border volume grew faster, a sign that travel and international spending remain healthy.

A role in new payment rails. In an Oct. 1 update, Visa said payments volume across more than 160 stablecoin-linked card programs grew nearly 200% from a year earlier. That supports the argument that Visa can participate in emerging payment technology rather than simply be displaced by it, though the overall financial contribution has not been quantified.

A business model that avoids credit risk. Visa's network benefits from the long shift away from cash and earns transaction fees without lending to cardholders directly. Quarterly buybacks and dividends of $6.2 billion add to the shareholder-return case.

The cost side to watch

Not every line grew in step with revenue. In the third quarter, client incentives rose 18% to $4.7 billion and adjusted operating expenses rose 17% to $3.9 billion, both faster than the 14% revenue gain. That makes spending durability, cross-border activity and cost discipline the key items in the Oct. 27 report.