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Affirm and Klarna could be like buying Visa and Mastercard 50 years ago, because buy now, pay later is likely to replace credit cards over 20 years as a form of controlled borrowing. Users can add money, earn interest, spend from a balance and borrow only when needed. Against a reply that BNPL could cause a financial crisis, credit cards carry far more risk than BNPL. x.com x.comÂ
Affirm is a bottom-fishing opportunity now that it has turned from years of losses to consistent profitability. Q2 fiscal 2026 EPS of $0.37 beat estimates, revenue rose 29.6% and GMV 36.6%, and trailing net income turned positive. Its Amazon partnership runs through 2031, Lowe's has joined, and BNPL demand should rebound as rates improve. At about 35x forward earnings and a PEG of 0.72, the stock is reasonably valued or even undervalued for its growth. x.comÂ
Klarna looks interesting because the market prices in recession and AI fears while its business keeps growing. Revenue is $3.5B, up 25% year over year, and active consumers rose 28% to 118M. Net cash of $3.73B equals $9.88 a share, leaving an enterprise value of only about $2.3B at about $15.70. It cut headcount 49% while doubling revenue with AI, and the stock is down 73% from its IPO high. x.comÂ
Affirm's claim of a resilient consumer rings hollow because its model offers little visibility into credit risk. Like mortgage underwriters before the housing collapse, it originates and sells the loans, so it bears little risk itself. BNPL is opaque, with payments not reported to credit agencies; a survey found 41% of buyers made late BNPL payments over 12 months, against a reported 1.2% 30-day delinquency rate. Fitch assumes a 4% default rate because it is not given pool delinquency data. … Show more
A clearing of the gloomy environment will make lending stocks the next multibaggers. SoFi, Upstart and Klarna are down now, much as many cybersecurity stocks were before rising two- to fourfold in under six months. Better Home & Finance (-75% YTD), LendingTree (-55%) and Rocket (-47%) join them among lending names whose current prices will look dirt cheap in 2028-2029. x.com x.comÂ
Mastercard may be the only scaled, capital-light network benefiting from AI, with bloated technical debt uniquely addressable by coding tools. Nominal inflation-linked recurring revenues and hardware attach add to the case at low-teens free-cash-flow yields. While payments getting bid in a red market probably signals the rally is over, these traits could mean it is not. x.comÂ
Fintech's slide looks like a broad rotation out of the sector rather than isolated company weakness, as investors buy the largest beneficiaries of the AI infrastructure buildout. SoFi is down 43% year to date, with similar weakness at Klarna, Shift4 and Toast, as capital leaves fintech, software and emerging markets for semiconductors, networking, memory and AI infrastructure names such as Nvidia, Broadcom, Micron and Nebius. SoFi CEO Anthony Noto said the decline bothers him. x.comÂ
Klarna could reach $50 a share in 2028-2029, though lowered guidance and the macro environment could push it down to $10 first. x.comÂ
Klarna is too cheap at 9x 2028 earnings, with strong double-digit annual growth expected even beyond 2030. Its latest results were not that bad. Margins rose, asset quality improved, and the slowdown came solely from softer sales in Germany. x.comÂ
Klarna looks highly undervalued, and the PriceRunner ruling comes at an ideal time, with the post-IPO lock-up behind it and the stock in a bullish technical setup that could clear key Fibonacci and 200-day levels. Backed by solid earnings, it could reach $35-plus by year-end, and the fintech winter appears to have bottomed. x.comÂ
Klarna's CEO bought $9.9M of shares, a strong signal of confidence. Its exposure to Germany and a weaker consumer economy is an issue but is likely priced in at these levels, and Jim Cramer saying it is not a buy is a contrarian reason to be bullish. x.comÂ