(Bloomberg) – A rebound in Square Inc. shares in recent months has brought the digital payments company’s market valuation to the ranks of some of the largest banks in the United States.
Square has a market capitalization of about $ 55 billion after doubling since May, making it worth more than Truist Financial Corp. and all but four banks in the KBW Bank Index. While JPMorgan Chase & Co. and Bank of America Corp. still dwarf it, Square is less than $ 20 billion from Goldman Sachs Group Inc.’s market valuation, which is $ 74 billion.
Square shares continued to set records in recent weeks as optimism rises over the growth of digital payments and the coronavirus pandemic changes consumer behavior and corporate spending. The San Francisco-based company has particularly benefited from positive sentiment about its popular application of cash, its handling of pandemic-related government stimulus payments, and its ability to obtain deposits from traditional banks with fewer digital offerings.
Tech stocks have soared this year, while banks have sunk. The Nasdaq 100 Heavy Technology Index has gained 21% and the KBW Bank Index has fallen 35%.
Square bounced back up to 13% on Monday after an analyst suggested it could eventually earn up to 20% of US direct deposit accounts.
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