Financial technology has become the focal point of our economy. Consumers are losing faith in traditional banks and fintech companies are making the most of it. Fintech stocks have shown impressive growth and the potential to deliver solid gains. The companies are leading the way toward digitization and offering an ideal solution to consumers looking to invest, deposit, borrow and shop. There is a noticeable change in how users view the financial system and adapt to the shift in how we handle money. If you are ready to make the most of this shift, here are the hot fintech stocks to watch in 2024.
SoFi Technologies (SOFI)
Over the past few months, a lot has been written about SoFi Technologies (NASDAQ:SOFI). Since the resumption of student loan payments, SoFi has become a hot stock. The loan repayment is anticipated to lead to a higher demand for loans, and SoFi will benefit. The growth stock is already up 121% in the year and is exchanging hands for $9.95. But it is one of the hottest fintech stocks with the potential to double in 2024, and buying it below $10 will give you a chance to make the most of the upside.
This fintech is a financially stable business on the way to profitability. The management expects to report a profit in 2024, and I think it is on the right path. SoFi has maintained the user growth momentum and reported fantastic growth.
When smaller, traditional banks struggled, SoFi continued adding users to its business. It saw a rise in customer deposits and ended the third quarter with $15.7 billion. It added 717,000 users in the quarter, and the CEO aims to add at least 1 million new members each quarter in 2024. The fourth quarter results will be interesting and it could give a boost to the stock.
Looking at the bigger picture, SoFi seems well-positioned to become a big bank in the coming years, and I am certain it will have an exceptional 2024. This is a millionaire maker stock; getting your hands on it early will mean bigger gains.
Buy Now, Pay Later (BNPL) service provider Affirm (NASDAQ:AFRM) was trading as high as $164 in November 2021. It has lost a lot of value since but remains a top fintech pick. Trading at $49, the stock is up 440% in the year, and the upward momentum is expected to continue.
Consumers have used BNPL for Black Friday shopping, and I believe the same trend would have continued for their holiday shopping. This will ensure that the company reports an impressive fourth quarter. As consumer spending improves, Affirm is set to benefit. It also has an advantage over other companies because of its partnerships with e-commerce giants.
Affirm already has partnerships with Shopify (NYSE:SHOP) and Amazon (NASDAQ:AMZN) and has recently entered into a partnership with Walmart (NYSE:WMT), giving the stock a boost. Consumers can now pay for their purchases at more than 4,500 Walmart locations in installments. At the same time, the company is still unprofitable but ready to disrupt the payment industry.
In the recent quarter, it generated $446 million in net revenue and reported an operating loss of $244 million. The company will take time to report a profit since it spends a lot of money on marketing and innovation, and it may take several years to reach the breakeven point. However, if it can survive the tough competition, Affirm has a long way to go.
It is too soon to write off PayPal (NASDAQ:PYPL). The company had a tough year, and the stock has dropped 17% in value, but there is much more to come. I believe that improving the economic conditions will help the stock move higher. The company benefited from the loose monetary policy in 2020, and although unable to repeat the performance, it has the potential to move upward. As consumer spending improves, we can see PayPal perform better.
The company benefits by serving consumers and merchants, which helps it benefit from both networks. PayPal expects to generate 6-7% revenue growth this quarter, and it is investing in initiatives and programs that will bring users to the platform.
The PayPal Rewards program has already had more than 25 million consumers benefit from the cashback. Further, it also has the PayPal Cashback Mastercard, which has helped increase user engagement and spending on the platform. As and when consumer spending improves, we could see these services gain momentum. The company has a new CEO, a strong balance sheet and a solid history of operations. This will work in its favor in 2024 and we could see the stock breakout.
PYPL stock looks incredibly cheap at the current level of $61, and buying it at this rate will mean massive growth in the coming months. It hit $308 in 2021, and while it is impossible to repeat this performance, we could still see a 50% upside from the current level.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.