The year 2024 may have started slow for fintech stocks, but the sector flipped the script in the second half.

JPMorgan's Reginald L. Smith points to a $65 billion leap in the sector's market cap since mid-September, driven by upbeat third-quarter results, rate cuts and post-election tailwinds.

As 2025 beckons, Smith envisions improving funding conditions and loan volumes lifting fintech lenders — but advises caution on current valuations ahead of the fourth quarter earnings cycle.

Among the standouts are three fintech players rewriting the rulebook: Kaspi, Affirm and Shopify.

Kaspi's Big Leap: 25% Potential Upside, Says Analyst

Kaspi.kz JSC KSPI isn't just a fintech favorite — it's redefining growth in the space. With a pending majority acquisition of Turkey's Hepsiburada, Smith notes Kaspi is tackling single-country exposure concerns head-on while expanding its total addressable market.

At just 8x 2025 earnings, Kaspi's robust fundamentals (30%+ revenue growth, 40%+ net income margins) note it is undervalued. The stock has a $137 price target, offering a potential 25% upside.

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Affirm's BNPL Domination: 12% Projected Upside

Affirm Holdings Inc AFRM continues to capitalize on the Buy Now, Pay Later (BNPL) trend, turning its partnerships with Amazon.com Inc AMZN, Apple Inc AAPL Pay, and Shopify Inc SHOP into long-term growth levers.

Smith highlights Affirm's strong credit metrics and reliable funding channels as key differentiators, with the company targeting profitability by FY25. With a $74 price target and 12% upside, Affirm remains a contender for fintech investors.

Shopify's Subtle Brilliance With 8% Upside

Shopify might not have the flashiest story, but its numbers tell a winning tale. Growing GMV (gross merchandise value) by $50 billion annually and revenue by $1.6 billion, Shopify is matching its COVID-19 pandemic-era performance while doubling its free cash flow margin.

Smith believes international growth and further upmarket penetration can keep Shopify on its 20% growth trajectory, even as subscription price increases loom as a future safety net. The $121 price target implies an 8% upside.

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