The third quarter of 2024 has been eventful to say the least. After the start of August was punctuated by strong global sales, the markets were shaken.
Now that recent downturns have proven that technology stocks are not immune to vulnerabilities, investors are increasingly inclined to invest in companies with more sustainable prospects.
There are many reasons why the thriving fintech landscape could become Wall Street’s most successful low-risk tech player in the second half of 2024.
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Growing expectations towards Federal Reserve cuts rates by 100 basis points Over the next couple of months, challenger banks’ lending services will be on fire. It will also improve consumer confidence in the United States, helping to provide the country’s most innovative fintech players with an opportunity to demonstrate their strength.
This would happen on a scale not seen since historically high inflation emerged nearly three years ago.
Additionally, fintech’s status as a rapidly growing market, expected to reach a value of $1.152 trillion by 2032. This represents a compound annual growth rate of 16.5% over the next eight years , highlights an industry that is a solid long-term bet for investors.
With that in mind, let’s take a look at some of the brightest fintech stocks to buy in August 2024:
Nu Holdings (NU)
Source: Shutterstock.com/ZinetroN
Right now, it’s hard to find a more interesting fintech stock than Nubank’s parent company, Nu Holdings (NYSE:NAKED). The company is building a huge customer base in Latin America.
Nubank recently passed the 100 million customer mark, becoming the first digital banking platform outside of China to reach this milestone.
Unlike some fintech companies, the company is also very profitable. Despite a net loss in 2022, Nubank recorded a net profit of $1 billion for 2023 on revenues of more than $8 billion.
Nubank’s vast potential was enough for Wall Street guru Warren Buffett to buy 107 million shares of Nu Holdings worth $1.19 billion when the stock went public, and the company’s innovation pipeline indicates there could be even more growth on the horizon for the challenger bank.
In July, it was reported that Nubank had enlisted Stocche Forbes Advogados in São Paulo with a view to acquiring Hyperplane, an American artificial intelligence startup.
The prospect of Nubank expanding its AI capabilities indicates a company keen to secure future growth and out-innovate its fintech rivals, making the stock a key consideration for investors.
PayPal (PYPL)
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One of the oldest fintech players on Wall Street, Paypal (NASDAQ:PYPL) hasn’t seen exceptional growth in 2024, but the company has been steadily improving its fundamentals ahead of what could be a strong end to the year.
The stock is up 10.30% over the past six months, after briefly falling, illustrating the level of volatility PYPL has experienced throughout the year.
Despite the recent volatility, PayPal remains optimistic about its 2024 outlook, indicating that outperformance could come in the second half.
PayPal raised its adjusted earnings forecast for 2024 following its second-quarter results, citing a 11% increase in payment volumes at $416.81 billion, a key factor in new optimism.
We can also see a strong innovation pipeline for the world-renowned fintech company. August saw PayPal open your Fastlane guest payment solution to U.S. businesses, indicating that the platform is actively reducing friction in the online shopping experience for many consumers.
Block Inc. (SQ)
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As a stock largely focused on a cryptocurrency sector that has recently suffered a significant downturn, Bloc Inc. (NYSE:S.Q.) became an attractive buying opportunity for investors in August.
Finishing down 13.54% year to date, Block’s struggles on Wall Street are not reflected in the company’s fundamentals, which have shown a higher profits in the second quarter per share reaching $0.93, well above the consensus of $0.76.
With news from a corporate restructuring heading to combat three lingering operational issues, said to revolve around “collaboration, craftsmanship and flexibility,” investors can expect more transformational activities from Block in the second half of 2024 .
Notably, Block CEO Jack Dorsey appears keen to strengthen the fintech company’s ties to cryptocurrencies like Bitcoin and recently suggested that Block would become Largest Bitcoin mining chip manufacturer.
Despite recent volatility in the cryptocurrency market, expectations remain optimistic about Bitcoin’s prospects of reaching a value of $100,000 per coin during its current halving cycle.
While the past few days have served as a reminder of how speculative crypto still is, a six-figure Bitcoin could bring significant growth opportunities for Block.
As of the date of publication, Dmytro Spilka did not hold (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.
At the date of publication, the responsible publisher had not (neither directly nor
indirectly) all positions on the securities mentioned in this article.
Dmytro is a finance and investment writer based in London. He is also the founder of Solvid, Pridicto and Coinprompter. His work has appeared in Nasdaq, Kiplinger, FXStreet, Entrepreneur, VentureBeat and InvestmentWeek.
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