Block (SQ -8.44%) stock jumped by as much as 6% today and is still up by 3.8% this afternoon.
Some investors are excited about the company being one of the first customers to use Intel's new blockchain accelerator chip. But does today's move mean investors should buy Block stock? Let's find out.
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Block has been expanding its focus to the cryptocurrency and blockchain spaces recently; hence, its name change from Square to Block back in December. And today's announcement by Intel that Block will be one of its first customers to use its new blockchain accelerator is a good indication that it's serious about its transformation.
Intel's new chip is lightning fast. The company claims it has 1,000 times better performance per watt than graphics processors used for Bitcoin mining. But it's not just quick; Intel says that it's also very energy efficient -- something Bitcoin mining is not known for right now.
All of this matters to Block because the company said last month that it's building an open-source Bitcoin mining system to make mining more distributed and efficient. Intel's chip could certainly help with this.
And here's where Block's opportunity comes in: The company is betting that decentralized finance (DeFI) could be the future of financial transactions. Block already has a strong position in the financial technology space with its Square Cash App, and it sees blockchain technology -- where transactions are recorded on a decentralized public ledger -- as the next iteration of its future.
Does that mean investors should buy Block just because it's using Intel's new Bitcoin mining accelerator? No, it does not. But the stock does look like a compelling buy right now because the company is a leader in the financial technology space and because it's expanding into DeFi.
Block's stock, even with today's jump, is still down 50% over the past three months. I think this slide has created a buying opportunity for investors to snatch up Block's stock at a time when the company is starting to bet big on entirely new ways to process, record, and manage financial transactions.
The company's Square Cash App and its strong position in the payment-processing space make for compelling reasons to own the stock. Add in its new blockchain focus, and I think it's an even smarter move.
