Fintech stocks that had been beaten down over the first half of the year are staging a comeback after high-profile names PayPal Holdings (NASDAQ:PYPL) and SoFi Technologies (NASDAQ:SOFI) posted better-than-expected Q2 earnings and raised 2022 guidance.
Global X FinTech Thematic EFT (NASDAQ:FINX) is gaining 4.9% in Wednesday afternoon trading.
PayPal (PYPL), up 9.3% in Wednesday afternoon trading, has a number of factors helping its shares today besides the earnings story — it reached a information sharing pact with activist investor Elliott Investment Management, and it's launched a $15B stock buyback program.
SoFi (SOFI) is surging 27% after Q2 revenue and adjusted EBITDA surpassed the Wall Street consensus. Morgan Stanley analyst Jeffrey Adelson pointed out in a note that the company's bank charter is executed more quickly than expected. That drove Q2 net interest income 10% ahead of Morgan Stanley's estimate and 4% over the Street's.
"On the liability side of the equation, in only its 2nd quarter the bank drove very strong deposit growth of $1.56B, averaging ~$120M per week," Adelson said. "This enabled SOFI to quickly replace higher cost warehouse debt which declined by ~$1.2B Q/Q."
See the jump in SOFI, UPST, SQ, PYPL and FINX shares in the five-day chart below.
Robinhood Markets (NASDAQ:HOOD), meanwhile, is climbing 13% after unveiling a restructuring plan that will cut its headcount by 23% and aims to slash 2022 operating expenses by as much as 29%. Its Q2 results showed some promising signs, including a sequential improvement in average revenue per user and narrower EBITDA loss.
Other fintech names getting a boost include: Upstart Holdings (NASDAQ:UPST), +17%, LendingClub (NYSE:LC) +9.0%, Lightspeed Commerce (NYSE:LSPD) +7.3%, and Nu Holdings (NYSE:NU) +5.4%. Block (NYSE:SQ), which reports earnings after the bell, is gaining 9.7%.