As the macro picture appears increasingly brighter, fintech stocks are coming back in vogue among investors. In recent weeks, many financial technology stocks have soared, in anticipation of possible interest rate cuts by the Federal Reserve in 2024. Although higher rates have been beneficial for traditional financial services firms (as high rates mean higher net interest margins), elevated interest rates have been a net negative for this segment of the finance sector. For instance, as the Wall Street Journal reported earlier this year, “higher for longer” interest rates have dampened demand for fintech services.
High interest rates and high inflation have also put the squeeze on consumer spending, affecting sentiment for payment-focused fintechs. Yet now, as inflation cools, and if interest rates come back down, the industry is well-positioned to experience a resurgence in growth. While there are many ways to play this “fintech” recovery, such as by purchasing high-profile fintechs like PayPal Holdings (NASDAQ: PYPL), you want to instead take a look at some of the lower-profile names that are nonetheless strong long-term opportunities. That’s the story here, with these seven fintech stocks to buy.
- Adyen (ADYEY): ADYEY stock could grow into its valuation (and then some) if it meets/beats its current financial objectives.
- Fiserv (FI): FI stock is reasonably-priced compared to its growth prospects, and could experience multiple expansion.
- Shift4 Payments (FOUR): Recent macro developments bode well for FOUR stock, which may also be a takeover target.
- Nu Holdings (NU): NU stock is one of the hottest fintech stocks out there, with high growth potential despite challenges like high interest rates.
- OppFi (OPFI): OPFI stock has been bouncing back, and may see much higher valuation and growth if macro conditions improve.
- Pagaya Technologies (PGY): PGY stock is a top choice for fintech stocks in 2024, with progress made in areas like loan securitization and a niche in the subprime automotive loan market.
- SoFi Technologies (SOFI): SOFI stock is a high-potential fintech, expected to deliver outsized earnings growth and scale up at a rapid pace.
