Block's Stock Plunges 22.02% on Revised Forecast, Consumer Spending Fears
1min read On May 2, 2025, Block's stock experienced a significant drop of 22.02% in pre-market trading, reflecting a sharp decline in investor confidence.
Block, led by Jack Dorsey, has revised its forecast for 2025 gross profit growth to 12% from 15%, and projected second-quarter gross profit at $2.45 billion, which is below previous estimates. This adjustment comes amid growing concerns about a slowdown in consumer spending, which accounts for more than two-thirds of U.S. economic activity. The fears of stagflation have intensified, leading to a cautious outlook for the company's financial performance.
The company's first-quarter profit has also fallen, highlighting worries about reduced consumer spending due to the ongoing trade war between the U.S. and China. The trade tensions have made it challenging for businesses to forecast demand, further exacerbating the economic uncertainty. The negative GDP data, which showed a 0.3% annualized decline, has added to the concerns, as companies front-loaded orders to lock in lower prices ahead of anticipated tariff increases.
