Fintech stocks continue to hold immense potential for delivering solid gains to investors. These companies are at the forefront of revolutionizing how we transact and think about money. And this includes the advent of cryptocurrencies like Bitcoin (BTC-USD).
As we witness ongoing disruption in the monetary system, fintech stocks are paving the way forward. To capitalize on these fundamental shifts, I’ve researched three fintech stocks that strike the right balance between risk and reward. Often overlooked in financial media, these hidden opportunities garner strong buy ratings from analysts.
Moreover, with falling interest rates predicted throughout 2024 and 2025, the economic environment is expected to favor fintech companies. This can boost market liquidity and growth.
Let’s examine three smartest fintech stocks to buy with $5,000 right now. Each stand poised to deliver substantial returns, revenue and earnings hikes for both short- and long-term investors. Don’t miss out on these great opportunities.
Visa (V)
Visa (NYSE:V) is widely regarded as one of the smartest fintech stocks in which to invest due to its continuous innovation and strategic initiatives.
Recently, Visa relaunched its SavingsEdge program, which offers enhanced value to small businesses in the U.S. and Canada. It includes features like Instant Coupons and Cashback Offers, allowing proprietors to save on essential purchases.
Another significant development for Visa is its achievement of issuing the 10 billionth token. The move generated $40 billion in incremental e-commerce revenue globally. Visa’s tokenization technology enhances security across digital payments by replacing sensitive personal data with cryptographic keys. This technology has not only improved transaction approval rates but also significantly reduced fraud. It saved the company $650 million in the past year alone.
Thus, Visa is in a great position to continue to offer value to SMBs as well as cut down on the rampant rates of fraud seen worldwide.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) remains a leading player due to its innovative approaches and strategic initiatives aimed at enhancing user experience and driving growth.
Recently, PayPal introduced several new features, including Fastlane. This one-click guest checkout experience significantly accelerates transaction times for merchants and consumers. Additionally, the company unveiled PayPal Smart Receipts. It leverages artificial intelligence (AI) to offer personalized recommendations and cashback rewards.
With a robust two-sided platform connecting 428 million active accounts, PayPal maintains a competitive edge in the fintech industry. Its vast user base and extensive transaction data enhance its ability to prevent fraud and improve authorization rates.
Additionally, PYPL manages to maintain its significant first-mover advantage in the industry despite the plethora of new entrants into the market. It also continues to innovate to maintain this edge, which forms a powerful moat around the business.
Affirm (AFRM)
Affirm (NASDAQ:AFRM) is gaining attention as a smart fintech stock due to its recent strategic moves and partnerships.
One significant development is Affirm’s collaboration with Apple (NASDAQ:AAPL). Affirm’s “buy now, pay later” (BNPL) service will be integrated into Apple Pay later this year. This partnership allows Apple Pay users in the U.S. to apply for Affirm BNPL loans during checkout, which could be a boon for the company.
Also, Affirm has seen positive momentum from financial analysts. Recently, Goldman Sachs initiated coverage of Affirm with a strong buy rating, highlighting it as a leading provider in the BNPL sector. This follows a similar strong buy rating from Mizuho.
AFRM’s robust growth is further supported by its recent quarterly earnings report. It exceeded analysts’ expectations, demonstrating strong revenue growth of 51.2% year-over-year (YOY) last quarter.
All of these factors together means that AFRM is one of my strong picks as part of the smartest fintech stocks to buy.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.