Over the past decade, many financial companies have adopted new technologies to challenge entrenched financial institutions. These “fintech” companies — which streamlined financial services with digital technologies — grew much faster than their traditional counterparts.
That growth spurt isn’t over yet. From 2025 to 2032, Fortune Business Insights expects the global fintech market to grow at a healthy CAGR of 16.2% as more consumers replace their traditional banks and brokerages with streamlined financial services. To capitalize on that trend, investors should focus on the fintech leaders with early mover advantages.
Let’s take a look at two of those promising fintech stocks: Robinhood(NASDAQ: HOOD) and Affirm(NASDAQ: AFRM). Both of these stocks are volatile, but they could easily turn a modest $500 investment into several thousand dollars over the next decade.
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Over the past decade, Robinhood disrupted traditional brokerages with its commission-free trades, streamlined app, and gamified approach to investing. From 2020 to 2024, its number of funded customers more than doubled from 12.5 million to 25.2 million. Its annual revenue grew at a CAGR of 32% during those four years, even as its growth stalled in 2022 upon reaching the end of the pandemic-era buying frenzy in meme stocks and cryptocurrencies.
By the third quarter of 2025, the company had reached 26.8 million funded customers. Its number of Gold subscribers — who get interest-free margin, lower margin rates, high interest rates on uninvested cash, and other perks for $5 a month — jumped 77% year over year to 3.9 million.
From 2024 to 2027, analysts expect Robinhood’s revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at a CAGR of 27% and 37%, respectively. That robust growth should be driven by its expansion and evolution into a comprehensive fintech platform offering a broader range of banking, wealth management, and AI-powered investment services.
With an enterprise value of $118.2 billion, Robinhood still looks reasonably valued at 36 times next year’s adjusted EBITDA. It could still have plenty of room to grow over the next decade as it pulls even more retail investors away from big brokerages and banks.
Affirm is a leading provider of “buy now, pay later” (BNPL) services, which enable consumers to split larger purchases into smaller installment plans without a credit card. It doesn’t charge any compound interest or hidden fees on those payments. Affirm’s merchant fees are also generally lower than the 1.5%-3.5% swipe fees charged by credit card processing networks.
Those advantages make Affirm a popular choice for lower-income consumers without credit cards and merchants that don’t want to pay high card-swiping fees. From fiscal 2021 to fiscal 2025 (which ended this June), its number of active consumers more than tripled from 7.1 million to 23.0 million, its number of active merchants soared from 29,000 to 376,800, and its gross merchandise volume (GMV) more than quadrupled from $8.3 billion to $36.7 billion.
By the first quarter of fiscal 2026, the company’s active consumers had increased to 24.1 million, and its active merchants had expanded to 419,000. On an adjusted basis, its 30+ day delinquencies stayed below 3% — so it wasn’t sacrificing its stability to gain new customers and merchants. Its business is also well-insulated from the macroeconomic headwinds affecting consumer spending, as consumers tend to use its BNPL services more frequently as their spending power wanes.
From fiscal 2025 to fiscal 2028, analysts expect Affirm’s revenue and adjusted EBITDA to grow at a CAGR of 25% and 131%, respectively. With an enterprise value of $27.2 billion, it still appears surprisingly affordable at 24 times this year’s adjusted EBITDA — and it will likely continue to grow as it attracts cost-conscious consumers and merchants away from traditional credit card companies.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
