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Fintech stocks refer to the shares of all those companies that are focused on financial technology and publicly traded. Financial technology brings together the most innovative tech developments and the financial system, to give people and businesses more intuitive and functional solutions to make transactions and manage personal and corporate finances.
Among all these stocks – the competition in the sector is fierce! – we selected five companies that all those interested in fintech should be watching: PayPal Holdings, Block Inc. (formerly Square), Robinhood Markets Inc., Coinbase Global Inc. and Affirm Holdings Inc
All the stocks related to these companies are stabilising or recovering and, in general, they look fairly priced.
Moreover, the sentiment surrounding the whole fintech industry is positive, especially because of its expansion across emerging markets and its constant evolution to meet people and businesses’ needs.
In this article, we will provide you with more detailed information about the top players we selected.
- 1 What are Fintech Stocks?
- 2 TOP 5 Fintech Stocks
- 3 List of Fintech Stocks
- 4 How to Invest in Fintech Stocks?
- 5 How to Choose Fintech Stocks to Invest In?
- 6 Where to Buy Fintech Stocks?
- 7 Conclusion
What are Fintech Stocks?
We said that fintech brings together tech and finance, and that publicly traded companies pertaining to this industry offer the opportunity to invest and trade in fintech stocks. But there are some other pieces of info that it’s pivotal to know about fintech stocks.
Being the companies they’re linked to focused on facilitating people and businesses’ lives, they were pivotal during the pandemic: while the stock market was extremely uncertain, fintech stocks overperformed, actually experiencing an unusual growth.
Now, most fintech companies need to make their growth more balanced and sustainable: fintech is here to stay – and improve – but stocks need to stabilise, and this is the reason why most fintech stocks are currently fairly priced – or even undervalued.
The companies we chose are currently experiencing this type of situation.
TOP 5 Fintech Stocks
For all the reasons we mentioned before, we can safely assess that traders and investors interested in fintech are watching the following stocks very closely.
In fact, since we are talking about reliable companies, which proved – and are proving – their resilience and strength, analysts, traders and investors expect the price of these fintech stocks to go up.
Some stocks are more likely to be profitable only in the long run, but if you’re interested in fintech stocks, you should know that the stocks we’re going to talk about are in the portfolio of retail investors, funds and institutions.
PayPal Holdings is the fintech company behind the popular payment method PayPal.
The company went public on the Nasdaq in 2002, and since then, it managed to acquire over 200 million users worldwide.
The top pros of this company are the intuitiveness of the payment method they launched and its security: users are able to make transactions seamlessly only by using their email address, avoiding sharing other sensitive personal details with recipients. Moreover, PayPal can be used for free and people can organise their finances, create different groups of recipients and save accounts to make transactions even easier and faster.
Countless payment methods can be linked to PayPal, and users rewarded all these functionalities by creating always more active accounts.
The fintech stock, with the ticker PYPL, is currently trading below $79, a good price if we consider that it’s still recovering from a downtrend. Analysts make positive predictions for 2023.
Block – Formerly Square
One of the founders of Square is the popular co-founder of Twitter Jack Dorsey. Square became Block in 2021.
This fintech company encloses many subsidiaries that cover different sectors – alternative payment methods and apps, web hosting, video streaming, to mention a few. Moreover, the products launched by Block are crypto friendly, as the whole company, which invested a considerable part of its capital in digital assets.
Square is in the portfolios of top funds and institutions, but current forecasts aren’t still very clear. This can be positive under an investor perspective: the stock doesn’t seem very volatile – at least in the near future – leaving room to new traders and investors that want to trade a fintech stock at a reasonable price. The stock is currently trading slightly above $75, under the symbol SQ.
This fintech company launched the popular broker Robinhood, which allows traders and investors to trade stocks, cryptocurrencies, ETFs (exchange traded funds) and options.
Robinhood Markets went public in 2021, making this one of the latest top players available for public trading.
The company, as it always happens, went through ups and downs, with an initial hype linked to the “meme stocks” – that is, those stocks made popular by retail investors, especially thanks to social media.
Currently, the fintech stock under the ticker HOOD is trading below $10, which is far below the very IPO price set at $38 in 2021.
Also in this case, forecasts tend not to predict too much volatility, with a price that should range between $8 and $11.
The goal of Robinhood – as the name of the company suggests – is to make financial markets open to anyone – and the fee-free trading offered by the app is in line with this purpose.
HOOD is the right choice for traders and investors who want to invest in inclusivity without spending huge budgets – but always remember to do your own research before investing your money!
Coinbase Global is the company behind the most popular cryptocurrency exchange in the US – and one of the top centralised exchanges in the world – Coinbase.
The company was founded in 2012, initially as a simple platform where people could buy Bitcoin with bank transfers. Coinbase went public on the Nasdaq in 2021, with a price per share set at $250. This price was exceeded that same day, closing at over $328.
Currently, the company stock – under the ticker COIN – is trading slightly above $57.
An impressive drop, also due to recent issues that depend on the more severe attitude of regulators.
If you’re interested in fintech stocks, and feel comfortable with cryptocurrency, COIN might be the right choice for you.
This fintech company was founded in 2012. One of its founders, Max Levchin, was also one of the co-founders of PayPal.
After postponing its IPO (initial public offering), Affirm went public on the Nasdaq in 2021 under the ticker AFRM.
Affirm is one of the fintech companies that experienced impressive growth after the breakout of the pandemic, but then it suffered both a natural downturn and the consequences of an unnatural growth: after an all-time-high at $176.65 experienced on November 8, 2021, AFRM is currently trading slightly above $12 – after touching a low at $8.80 on January 6.
The company is focused on offering BNPL – Buy Now, Pay Later – services. Affirm Global, in its relatively few years of activity, managed to close considerable acquisitions and partnerships – like the acquisition of Returnly and the partnership with Stripe. It’s also important to note that Affirm is also the only BNPL partner of Amazon in the US.
List of Fintech Stocks
How to Invest in Fintech Stocks?
Investing in fintech stocks might seem a sort of safe activity to many: the market is constantly growing, and top companies are already on the right track to rebalance their growth to make it more sustainable.
Nevertheless, fintech stocks are as risky as other financial assets. To avoid as many risks as possible, always keep a few points in mind:
- Do a careful research,
- Diversify your portfolio,
- Never invest a budget you can’t afford to lose,
- Use the right tools – we’re about to suggest you a broker we tested.
How to Choose Fintech Stocks to Invest In?
Choosing the right fintech stock for you is as important as knowing how to invest.
Also in this case, there are some principles you should always follow:
- Invest in something you know or you feel comfortable with – for instance, if you’re used to cryptocurrencies, you might prefer the stocks of a crypto-friendly company;
- Don’t choose overvalued stocks – this might lead you to totally unexpected and pointless losses;
- Consider both fundamental and technical analyses before investing – this will help you to better understand both the company and the prices of its stocks.
Where to Buy Fintech Stocks?
There are countless brokers to buy fintech stocks online, but as we anticipated, we tested one broker in particular that seems to meet all the requirements of a reliable and intuitive platform – eToro.
If investing and trading are complex activities, and they can even feel overwhelming, eToro makes things easier.
Users constantly award this broker with positive reviews, since they appreciate all the features of the platform – including the easy sign up process, for which we prepared a little guide.
Step 1: Sign up and create a new account on eToro
On the homepage of eToro click on “Sign Up” and fill the form with your email address, username and password. Alternatively, use your Google or Facebook account to sign up.
Step 2: Take a picture of your ID and just upload it
This will help eToro to confirm your identity and citizenship, to be compliant and make sure that you’re not coming from one of those countries where eToro doesn’t offer its services.
Step 3: Funds
To use the real eToro account (the platform also offers a demo account), you’ll need to top up your account by using one of the payment methods available – like credit and debit cards, or digital wallets.
Step 4: Search for the Fintech Stock You’re Interested In
Once you have enough funds – you can start with an amount as low as $10 – you’re ready to buy stocks. To easily find the fintech stock you’re interested in, type the name of the company or the stock ticker in the search bar. You won’t only find the page that will allow you to buy, but also opinions, data related to the company and analyses.
Fintech stocks, and the fintech market in general, constantly make headlines: continuous growth, adoption of fintech solutions by emerging markets, constant innovations that simplify the lives of people and businesses.
On the other hand, the sector is facing a period of stabilisation that is following the impressive growth this sector experienced after the breakout of the pandemic – and this also implies layoffs and a drop in fintech stocks prices, which might represent a good moment to buy if you’re interested in fintech companies.
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