Block’s XYZ Square is expanding its AI commerce strategy with a new ChatGPT app and Claude plugin. The initiative is designed to help sellers appear when customers ask AI assistants where to eat, shop or book services, while enabling users to place orders directly through those AI experiences.

The initial rollout covers U.S. food and beverage sellers using Square Online Ordering. Eligible merchants are opted in without extra technical setup, new tools or added Square marketplace commissions. Square syncs menu data, operating hours, business information and ordering details in real time through the existing Square Dashboard.

The timing is important because AI is quickly becoming a discovery channel for everyday purchases. Square cited data showing that more than 42% of consumers already use AI tools for shopping tasks, while agentic shoppers could drive nearly $385 billion in U.S. e-commerce spending by 2030.

The move fits Square’s wider strategy. Block’s Square is built to simplify commerce, automate operations and connect neighborhood sellers, including leveraging Cash App’s network of 59 million monthly actives. In the first quarter of 2026, Square Gross Payment Volume (GPV) rose 13% year over year to $61.2 billion, with international GPV up 35%, highlighting healthy demand across markets.

Block is also backing the product push with stronger financial momentum. In first-quarter 2026, the company’s gross profit grew 27% year over year to $2.91 billion, while Square’s gross profit rose 9% to $982 million. Block expects 2026 gross profit of $12.33 billion, representing 19% growth. While the outlook reflects execution across the broader business, the new AI integrations also underscore Square's long-term strategy to expand seller discovery.

How Are Its Competitors Expanding Through AI?

PayPal Holdings PYPL competes with Block through digital wallets, checkout solutions and merchant payments. Its agentic-commerce capabilities connect merchants to AI shopping via Agent Ready, Store Sync and OpenAI/ChatGPT checkout integrations, helping sellers become discoverable and purchasable within AI agents. In 2025, PayPal processed $1.79 trillion in total payment volume (TPV), up 7%.

Shopify SHOP competes with Block in merchant commerce software, POS, and payments. Its AI integrations include Sidekick, Shopify Catalog with live inventory/pricing sync, Universal Commerce Protocol and ChatGPT Instant Checkout, enabling merchants to sell through AI conversations while keeping order attribution in Shopify. In 2025, Shopify’s revenues reached $11.6 billion, up 30%.

XYZ’s Price Performance, Valuation & Estimates

Shares of Block have risen 11.4% over the past year, outperforming the broader industry but underperforming the S&P 500 Index.

In terms of forward 12-month P/E, XYZ stock is trading at 25.53X, which is at a discount to the Zacks Internet Software industry’s 26.22X.

Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised a cent northward to $3.90 over the past week. It indicates a 64.56% increase year over year.

Block currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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