Fintech is a compound word for financial technology. It refers to innovation in what is traditionally a very slow-to-adapt sector. Today, the sector comprises several blue-chip stocks representing companies that produce everything. Products and services range from back-end technology that makes banks operate more smoothly to consumer apps that facilitate the transfer of funds.
However it may manifest, fintech is a market that is predicted to grow rapidly moving forward. It is currently predicted that its compound annual growth rate between 2024 and 2032 will average 16.5%. Those growth rates are bound to produce stocks that appreciate dramatically.
The face of finance continues to change rapidly, meaning now is the time to invest. Capital deployed wisely today has the potential to grow into something much bigger in the future.
Visa (V)
Visa (NYSE:V) is one of the pioneers among fintech stocks. Today, it’s one of the leading blue-chip companies in the world and represents a strong investment overall. You have to rewind to 1958 to find its origins. It was that year that the company began issuing the first consumer credit cards. In 1976, Visa expanded card issuance internationally with the company growing into its current form.
Visa’s dominance in the fintech space is one reason I consider it one of the best fintech stocks to buy. Its dominance is reflected in its earnings. Most recently, the company’s top line grew by 10% while GAAP earnings increased by 12%. There’s a strong case to be made for investing in the stock from a fundamental perspective.
Furthermore, the company continues to show innovation with its recent announcement of its new generative AI tool for preventing enumeration attacks. These attacks involve the use of complex scripts and bots, resulting in more than $1.1 billion in fraud losses annually.
Nu Holdings (NU)
Nu Holdings (NYSE:NU) proves just how valuable the global opportunity in fintech stocks has become. A lot of that narrative centers around innovation bringing formerly unbanked customers into the banking sector.
The company added 19.3 million clients throughout 2023, bringing its total to 93.9 million at the end of 2023. Nu Holdings then surpassed 100 million customers on May 8, making it the first digital banking platform outside of Asia to reach that milestone. This has resulted in staggering growth across important metrics including net income with figures rising to $378.8 million for its first fiscal quarter of 2024, up from $141.8 in Q1 of 2023.
Latin America continues to receive a lot of attention concerning fintech because the region brings many new customers to the banking sector. Nu Holdings has done a particularly good job at this thanks to its efforts in Brazil, where it now counts 92 million of its clients, thus making it one of the better fintech stocks to buy.
MercadoLibre (MELI)
MercadoLibre (NASDAQ:MELI) is part Latin American e-commerce giant, and part Latin American fintech giant. It is the latter that we will be discussing concerning its strength as a blue-chip fintech stock worth consideration.
Both income and revenues increased by 36% in the first quarter of 2024. The overall fundamental picture for MercadoLibre remains strong. That picture includes its e-commerce segment and its fintech segment, the latter of which we are focusing on here.
That segment largely comprises Mercado Pago which reached 49 million active users during the period. Those user base numbers represented an increase of 38% during the quarter on a year-over-year basis. That growth is substantially higher than the 32% growth The firm reported a year prior. MercadoLibre’s management attributes that increase to strengthening retention rates and a greater number of fintech products on its platform.
The company issued more than 1.5 million credit cards in Brazil and Mexico during the first quarter. Investors can find multiple other metrics all pointing to continued hypergrowth for MercadoLibre.
On the date of publication, Alex Sirois did not have (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.
