Visa (V) looks attractive after a period of muted stock performance, as the business continues to generate strong cash flow and execute well. The latest quarterly results last week reinforced that strength, with cross-border spending, services growth, and operating leverage all moving in the right direction. The global leader in digital payments is benefiting not only from the steady shift toward digital payments but also from newer growth drivers, including travel, value-added services, and next-generation commerce infrastructure.
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Forget margin or options. Here's how the pros trade AMZNWith the business still compounding at a high level and the valuation remaining reasonable for a company of this quality, the long-term case remains very much intact. That is why even after a year of lackluster returns, I remain strongly bullish on Visa today.
Travelers Who Don’t Mind the Price
The numbers coming out of Visa’s latest quarterly print were, to put it bluntly, a total shock to the bears who had spent the last six months predicting a consumer collapse. There was a staggering 20% spike in non-GAAP earnings per share (EPS), but the more exciting data came from international transactions, where Visa saw a 12% jump in cross-border volume. This is clear evidence that the high-end traveler carrying heavy-metal cards is completely ignoring this year’s “war-tax” inflation, which has dominated the headlines.
Discretionary spending may be getting squeezed for the average household, but the global elite are still booking transatlantic flights and five-star stays without batting an eye at the price tag. Visa, in turn, can funnel those dollars seamlessly. In fact, the combination of organic growth and international transactions growth led to 17% top-line growth in Fiscal Q2, marking continued re-acceleration. For context, it was the best quarterly growth we’ve seen since Q3 2022.
For a giant that already handles trillions of dollars in payments, finding gears to speed up like this is a feat that defies the gravity usually associated with mega-cap stocks. It also shows us that the “revenge travel” narrative wasn’t a one-time post-pandemic trend but a structural shift in how the world’s most affluent spenders prioritize their capital. In the meantime, when the affluent, as well as anyone else, really, spend more in nominal terms because of inflation, Visa collects a larger fee without having to increase its own overhead.
The New Engines of Global Acceleration
Looking ahead, management’s commentary from the Fiscal Q2 earnings call suggests the company is working hard to sustain the ongoing acceleration without relying on today’s already favorable trends. CEO Ryan McInerney specifically pointed to the burgeoning world of “agentic commerce” as a major driver for the next decade.
Visa has partnered with cloud heavyweights like Amazon’s (AMZN) cloud services, Amazon Web Services (AWS), to create secure, automated payment workflows for artificial intelligence (AI) agents, ensuring its credentials serve as the default plumbing for a future in which machines handle our bookings and purchases. This could prove a moat-widening move that positions Visa to capture “invisible” volume that doesn’t even require a human to pull out a wallet.
Beyond the AI-driven future, there are immediate catalysts suggesting the ongoing acceleration is sustainable across the board. The company’s value-added services revenue, which covers everything from fraud protection to sophisticated data analytics for banks, surged by roughly 27% this past quarter.
Some investors think of these as just “add-ons.” However, they are becoming central to the Visa story, turning the company into a high-margin software and security powerhouse that “happens” to process payments. With new cross-border corridors opening up and a massive push into “always digital” credentials in regions like Europe and Latin America, the pipeline for growth looks more robust than it has in years.
A Wide Moat at an Attractive Multiple
Visa’s investment case has always been about its one-of-a-kind moat. The duopoly with Mastercard (MA) means owning either of the two is like owning the very scarce rails on which global money moves. Because Visa takes a small cut of transaction volume, inflation quietly works in its favor. As prices rise, so does the dollar value flowing across its network. Consumers spend more just to keep up, and every extra dollar tapped or swiped gives Visa a small, almost automatic raise.
Visa’s real edge is the world’s steady shift away from cash. That shift has fueled double-digit growth for years, and it isn’t slowing down. That’s why I think the stock is a steal right now. It’s trading at 25x 2026 consensus EPS forecast of $13.07, which is a great price for a business this strong. It’s key to remember that while the stock saw a nice post-earnings bounce, it has actually been under pressure for much of the past year, down from its highs despite the business firing on all cylinders.
There is a massive disconnect here. The stock price has been languishing, yet the business is growing earnings in the high teens — and pushing into the 20s thanks to the massive buybacks. That gap is exactly where the long-term opportunity lies.
Is Visa Stock a Buy, Sell, or Hold?
After lagging over the past year, Visa stock now has a Strong Buy consensus rating on Wall Street, based on 21 Buy and two Hold ratings. Notably, no analyst rates the stock a Sell. Furthermore, Visa’s average price target of $391.09 implies roughly 21.56% upside potential over the next 12 months.
Final Thoughts
Visa has repeatedly proven that its network is the indispensable plumbing of global commerce. It is thriving again, even during this year’s inflation, which weighs on the broader world. With a significant EPS beat in Fiscal Q2 and a traveler class that refuses to slow down, the stock’s current 25x multiple is likely to look like an absolute steal in hindsight. For this reason, I view Visa as the ultimate “buy-and-hold,” especially at today’s share price levels.