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Fintech Stocks To Buy

The fintech industry has taken a beating in the past few months due to soaring inflation and rising interest rates, a combination that has pushed investors towards value offerings at the stock market. However, the slowdown has also created incredible buying opportunities in the fintech sector that looks set to rise given the advancements being made in the fields of artificial intelligence, robotic process automation, smart contracts, DeFi, and virtual reality. Fintech is no doubt the biggest disruptor in the finance industry.

fintech stocks to buy

This disruptive force has already won the hearts of tech giants like NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), all of whom have pledged hundreds of millions into the development of fintech products over the next few years. As the fintech market evolves from a disruptive one to an established one, as indicated from the more than 26,000 fintech firms in existence, it looks ready to capture a huge chunk of the $4 trillion global e-commerce market by 2027.

Some of the key trends shaping the fintech industry include the introduction of new features, the expansion of machine learning algorithms to beat fraudulent practices, and the gradual phase out of cash and physical cards that are being replaced with virtual cards secured with robust biometric technology. According to Fintech Magazine, about 30% of all banking customers use at least one financial service offered by a non-traditional provider, and this number looks set for explosive growth in the coming years.

The companies that operate in the fintech sector were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Futu Holdings Limited (NASDAQ:FUTU) operates an online brokerage and wealth management platform in Hong Kong and internationally. It is one of the best fintech stocks to invest in. The stock has gained in the past few weeks after reports suggested that the US and China had reached a tentative auditing deal that would allow independent access to the accounting books of Chinese firms, in line with new US regulations in this regard.

Just like NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Futu Holdings Limited (NASDAQ:FUTU) is one of the best fintech stocks to buy now according to hedge funds.

Upstart Holdings, inc. (NASDAQ:UPST) operates a cloud-based artificial intelligence (AI) lending platform in the United States. It is one of the top fintech stocks to invest in. The company recently announced that it had allowed Vantage West Credit Union to offer personal loans to new and existing members across Arizona. Vantage West is a credit union with over 170,000 members and assets amounting to more than $2.6 billion.

SoFi Technologies, Inc. (NASDAQ:SOFI) provides digital financial services. It is one of the premier fintech stocks to invest in. The company recently announced that it had signed Justin Herbert, a quarterback for the Los Angeles Chargers, on a three year partnership. Under the terms of the deal, Herbert will take part in a new brand campaign and television ad.

Affirm Holdings, Inc. (NASDAQ:AFRM) operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. It is one of the elite fintech stocks to invest in. The company recently announced that it would extend the services it offers on Amazon with the introduction of pay-over-time option to customers in Canada. This addition will enable shoppers to pay in installments.

Coinbase Global, Inc. (NASDAQ:COIN) provides financial infrastructure and technology for the crypto economy. It is one of the most prominent fintech stocks to invest in. On September 29, the company announced that it had teamed up with investment management software provider SS&C to expand the digital asset trading capabilities of the latter. Through the partnership, SS&C clients will gain access to the institutional crypto trading platform, Coinbase Prime.

In addition to NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Alphabet Inc. (NASDAQ:GOOG), Fiserv, Inc. (NASDAQ:FISV) is one of the best fintech stocks to buy now according to hedge funds.

Financial technology, or fintech, stocks have significantly underperformed in 2022. As a group, these stocks lag behind the S&P 500, which is off 14.4% on a year-to-date basis through Dec. 2. Compare that to popular fintech exchange-traded fund ARK Fintech Innovation ETF (ticker: ARKF), which slid 59.5% in that period. While fintech investors may be tempted to flip the calendar and move on, Wellington Management analyst Matt Ross notes that the fintech sector will likely rebound in 2023, offering investors an opportunity to pick fintech stocks on the cheap. Given that scenario, these seven fintech stocks are worth a closer look.

In this article, we will be taking a look at the 12 most promising fintech stocks to buy. To skip our detailed analysis of the fintech sector, you can go directly to see the 5 Most Promising Fintech Stocks To Buy.

The Financial Technology (fintech) sector has been benefitting immensely from growing investments since the last global financial crisis. With the world becoming increasingly aware of the shortcomings of the conventional financial services industry after the 2008 financial crisis, the expansion of fintech arose as a reaction. This is commonly known as the first wave of fintech, with the second wave coming about quite recently during the COVID-19 pandemic. During this time, the fintech sector evolved even further as financial institutions took steps to partner with emerging technology companies to gain access to newer markets.

The trends noticed in the second wave of fintech explain how today, apart from pure fintech companies like Coinbase Global, Inc. (NASDAQ:COIN), conventional financial companies like Mastercard Incorporated (NYSE:MA), and Visa Inc. (NYSE:V) are also beginning to join the fintech sector. Today, these companies are the most exciting fintech innovators to follow. Mastercard Incorporated (NYSE:MA) and Visa Inc. (NYSE:V) have both been working with third-party merchants on smart-chip technologies for contactless payment and more. These companies have also launched cards with embedded fingerprint scanners that act as biometric readers. They are also focusing on expanding their application programming interfaces to simplify their networks and increase their attractiveness to fintech startups.

With the growing interest in fintech mentioned above, it is unsurprising how much the sector's revenue is expected to increase in the near future. According to a Deloitte report, the global fintech revenue is expected to grow at a compound annual growth rate of 11.7% between 2019 and 2024. Between 2018 and 2020, the STOXX Global Fintech Index also rose by 50%. The fintech sector also saw share price recoveries within four months after COVID-19 hit the capital markets, demonstrating the sector's ability to rebound in times of economic turmoil. As a result, analysts and investors alike are highly bullish on the fintech sector today, leading us to compile a list of the most promising fintech stocks to buy today.

We scoured the fintech stocks universe and picked 12 stocks with strong upside potential based on average analyst price targets. We used TipRanks data as the source for average price targets. These stocks are also popular among the 943 hedge funds tracked by Insider Monkey in the fourth quarter of 2022. They are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest.

Affirm Holdings, Inc. (NASDAQ:AFRM), like Coinbase Global, Inc. (NASDAQ:COIN), Mastercard Incorporated (NYSE:MA), and Visa Inc. (NYSE:V), is a fintech company with overwhelming potential according to hedge funds today.

Robinhood Markets Inc. (NASDAQ:HOOD) is an investment banking and brokerage company based in Menlo Park, California. The company offers a platform through which users can invest in stocks, exchange-traded funds, options, gold, and crypto.

Mercadolibre, Inc. (NASDAQ:MELI) has recently partnered with WhatsApp Pay in a bid to expand its e-commerce and fintech market share in Brazil. The company is set to benefit from the new customers available to it through this partnership, since WhatsApp has the highest penetration rate in the Latam social media market, going up to 90% by 2022. Mercadolibre, Inc. (NASDAQ:MELI) has also been seeing promising growth in its Argentina operations, with operating margins of 38.4%.

COVID-19 accelerated the adoption of digital payments. Work-from-home arrangements, lockdowns and the surge in e-commerce drove a surge in digital payments and benefited various financial technology firms, also known as fintech stocks.

The solid demand for digital payments has attracted new as well as established players in the fintech space. A report by research firm CB Insights revealed that fintech funding surged 168% to nearly $132 billion in 2021. It's worth noting that $1 out of every $5 of venture capital funding in 2021 was invested in a fintech startup.

Amid the growing acceptance of digital payments, partnerships as well as mergers and acquisitions are on the rise, with tech giants like Apple (AAPL (opens in new tab)) and Amazon (AMZN) eyeing growth in the lucrative fintech market.

Meanwhile, the fading of pandemic-induced tailwinds, macro challenges, geopolitical concerns and a potential economic slowdown could impact fintech stocks over the near term. That said, the long-term prospects for the financial technology space look attractive due to the convenience and speed of transacting, continued rise in e-commerce and the growing adoption of contactless and mobile payments. 041b061a72


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