With clear skies on Wall Street, Q3 2024 could be a watershed moment for fintech stocks

The third quarter of 2024 is set to reveal numerous investment opportunities in the fintech landscape. Driven by expectations of a return to optimism across Wall Street, financial technology will become a key growth sector in the months to come.

With the probability of Federal Reserve rate cuts occurred in the United States in the third quarter of 2024, there may never be a better time for investors to add fintech stocks to their wallets.

Crucially, the prospect of rate cuts will encourage higher investment volumes across Wall Street and increase spending power and consumer confidence, to the point where fintech platforms could see higher levels of usage.

As the holiday season approaches, more consumers are likely to adopt investment apps, make more payments, and show a strong interest in using financial services for loans and other purposes.

While the generative AI boom has captured the imagination of retail investors in recent months, the third quarter could belong to financial technology. These three stocks could offer significant growth potential for investors.

Global Payments Inc. (GPN)

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Strengthening consumer confidence following the Fed’s rate cuts could lead to a recovery Global Payments Inc. (London share:National Toll Free Number) at a time when the payments technology provider’s shares are steadily declining.

GPN closed the first half of 2024 down 23.96%, more than 55% below its all-time high market value recorded in 2021.

Despite this, Global Payments Inc. remains a leading payments technology and software solutions company that is poised to grow amid growing demand for point-of-sale solutions among retailers and hospitality companies.

Although we have recently seen analysts at Seaport Res Ptn lower estimates for the second quarter of 2024 for GPN slightly to earnings per share of $2.72 for the quarter, up from $2.73, it is worth noting that Global Payments beat earnings estimates for the last four consecutive quarters.

With higher payment volumes expected in Q3 2024 and beyond, we can expect to see further outperformance from Global Payments. After its recent struggles, the stock could represent a large discount for long positions.

PayPal (PYPL)

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Following the appointment of CEO Alex Chriss in September 2023, Payment via PayPal (NASDAQ:PYPL) has struggled to generate significant momentum to recover its stock price after closing the second quarter of 2024 more than 80% below its all-time high market value.

However, PayPal’s fortunes may be about to change. Recent news That Apple (NASDAQ:AAPL) will be forced to share some of its payments technology following a deal with European Union antitrust authorities, which has sent PYPL soaring on Wall Street.

Apple’s commitment to open up its near-field communications technology represents a key opportunity for PayPal to provide substantial levels of competition to Apple. As a result of the deal, analysts at Mizuho Securities have assigned PayPal an “outperform” rating with a high target price of $90.

While analysts at Seaport Res Ptn lowered their expectations for Global Payments, PayPal received a small increase to $0.97 per share from initial forecasts of $0.96 per share.

Another source of optimism for PayPal can be found in the performance of the fintech company’s stablecoin, PayPal USD (PLUS USD)which recently passed a Market cap of $500 millionwhose value has nearly doubled in the last month alone.

This conscious expansion into the world of decentralized finance and cryptocurrencies could offer further growth opportunities in a fintech landscape ripe for further innovation.

Nu Holdings Ltd. (NU) Joint Stock Company

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One fintech stock that has shown a lot of strength since its Wall Street debut in 2021 is Hu Holdings Ltd. Joint Stock Company (London share:NEW). Operating a digital banking platform in Latin American countries such as Brazil, Mexico and Colombia, the company has become a leading fintech company across the region.

The company provides access to credit and debit cards, mobile banking, savings accounts, cryptocurrency trading, and a variety of other investment products.

As a leading challenger bank in Latin America’s growing fintech ecosystem, investors are very optimistic about Nu Holdings’ long-term prospects. Third-quarter data suggests that well 50 hedge funds were bullish on NUup from 44 who expressed positive sentiment towards the stock in the previous quarter.

Furthermore, Berkshire Hathaway (London share:BRK-ANew York Stock Exchange:BRK-B) underscored his commitment to Nu Holdings by holding more than 107 million shares valued at $776.6 million.

The most important growth driver for Nu Holdings in Q3 2024 comes from the improving economic ecosystem in Latin America. The average inflation rate in the region increased in 2023 reach 14.41%making Latin America’s recent inflation problems much more severe than the world average.

While consumer sentiment is still struggling to gain momentum in the region, we can expect better fiscal control in Q3 2024 to pave the way for rising consumer confidence and increased use of financial services in Latin America. This could help the stock rally beyond the 58.55% growth that Nu Holdings has already achieved in the first half of 2024.

As of the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any position in the securities mentioned in this article. The views expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.

As of the date of publication, the responsible editor did not hold (either directly or indirectly) any position in the securities mentioned in this article.

Dmytro is a London-based finance and investment writer. He is also the founder of Solvid, Pridicto, and Coinprompter. His work has been published in Nasdaq, Kiplinger, FXStreet, Entrepreneur, VentureBeat, and InvestmentWeek.

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