Block shares surge after nearly half the workforce is cut in AI-driven shakeup
Fourth quarter earnings season is entering its final stretch. The payments company block said it will reduce its workforce by nearly half as part of a major artificial intelligence bet, a move that accompanied its fourth-quarter earnings report and sent shares up more than 22% in extended trading.
Jack Dorsey orders steep cuts, frames move as long-term AI bet
Jack Dorsey wrote in a post that the company was making "one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10, 000 people to just under 6, 000. That means over 4, 000 of you are being asked to leave or entering into consultation. "
He added, "Something has changed, " framing the decision as a risk intended to position the company for long-term growth. Dorsey cited new artificial intelligence tools that can automate work, saying AI is "enabling a new way of working which fundamentally changes what it means to build and run a company. "
Block's fourth-quarter results and raised guidance
In the fourth quarter, block reported adjusted earnings per share of $0. 65, in line with Wall Street estimates, and revenue of $6. 25 billion, which slightly beat expectations of $6. 21 billion. the workforce reduction came alongside that quarterly update.
Block also raised its full-year guidance. The company, which supports the CashApp and Square platforms, said it expects gross profit growth of 18% year over year in 2026 and adjusted operating income of $3. 20 billion, or a 26% margin.
Nvidia closes out the Magnificent Seven and raises AI questions
Earnings from Nvidia this week marked the final company among the "Magnificent Seven" tech stocks to report quarterly results. The report offered a crucial update on how demand for its high-tech AI chips — a big part of the hundreds of billions of dollars its Big Tech peers are spending on AI investments — continues to shape up.
Even with a beat and a raised forecast, concerns about increased competition and the drivers underpinning Nvidia's strong outlook overshadowed the results and sent the stock 5% lower on Thursday.
Acquisitions and upcoming reports to watch: Warner Bros. Discovery and Paramount Skydance
Other key results this week include reports from Warner Bros. Discovery and Paramount Skydance, with Paramount Skydance currently locked in a duel with Netflix to acquire Warner Bros. Discovery. Several notable companies remain on the calendar: Salesforce, Home Depot, and Lowe's are expected to report in the coming week.
Market movers beyond Block: Flutter, Duolingo, Intuit and Nutanix
Flutter Entertainment's stock fell 12% before the bell on Friday after the company reported disappointing revenue of $4. 74 billion last quarter, below projections of $4. 93 billion. Duolingo shares sank 25% before the bell on Friday after reporting fourth-quarter earnings that beat analyst expectations but issuing disappointing guidance for 2026; it is changing its strategy to prioritize user growth over near-term profitability.
Intuit stock fell about 2. 5% in after-hours trading as the company's fiscal third-quarter profit forecast disappointed investors. The third quarter is usually Intuit's strongest, as more users turn to the company for tax help; it expects to spend more on marketing to attract customers to tools such as TurboTax.
Cloud computing provider Nutanix reported strong earnings and announced a multiyear deal with AMD on Wednesday, sending its stock more than 15% higher in premarket trading on Thursday. For the fiscal second quarter, Nutanix reported adjusted earnings per share of $0. 56 on revenue of $722. 8 million.
