3 Fintech Stocks That Are Set to Rise as Rates Fall

Key Points

• Fintech stocks are already showing signs of strength since the Federal Reserve rate cut in September.
• Upstart posted a surprise return to profitability in Q2, showing what’s possible even before the full impact of lower rates.
• Affirm and Rocket Companies are gaining analyst support as their business models are early-cycle beneficiaries of easing monetary policy.

Shares of Upstart Holdings Inc. NASDAQ: UPST, Affirm Holdings Inc. NASDAQ: AFRM, and Rocket Companies Inc. NYSE: RKT are under tremendous upside pressure right now. Each company has a strong individual value proposition, and some are already beginning to show in price action that hints at a potential bull run. 

But the real tailwind is what's going on in fintech as the Federal Reserve begins to cut rates.

The first cut finally came in September, and at least two more are expected before the end of 2025. Consumer sentiment has been slow to reflect this, but markets are already moving. That is what makes these three names worth watching closely as the cycle turns.

Upstart's Bottleneck Is Starting to Clear

Upstart Holdings operates an AI-driven lending platform that helps banks and credit unions assess credit risk more effectively than traditional FICO-based models. Its success depends heavily on loan approvals, which are tied to broader interest rate conditions.

When interest rates fall, approval rates rise, creating higher loan volumes. That is where investors uncover Upstart's cash cow: loan referral and servicing fees. Lower rates not only increase originations but also reduce delinquency risk—both of which create a steady and strong revenue stream for the company.

UPST is trading at only 53% of its 52-week high, indicating a fundamental disconnect between its 33% earnings-per-share (EPS) beat in Q2 2025 and its current price action. For the second quarter, Upstart reported 36 cents in EPS, whereas the MarketBeat consensus was 27 cents.

If Upstart easily beat analyst expectations before the Fed rate cuts took effect, investors are left wondering what future financial performance could look like when as this first rate cut—and future cuts—are fully priced in.

This is why Wall Street analysts have maintained their consensus price target of $81.08, a potential 56% upside from today’s prices, despite the bearish price action in the stock.

Affirm Could See Faster Benefits

Because Affirm operates on a floating-rate basis, unlike Upstart, its ongoing operating costs and financing costs are directly tied to the short-term fluctuations in interest rates. This is why Affirm’s benefits from rate cuts are seen much sooner.

Affirm specializes in Buy Now Pay Later (BNPL) financing, letting consumers split purchases into installments. While often seen as risky, adoption is growing.

More and more Americans are using this service to finance everyday purchases, with over 25% of its users indicating they use BNPL for basic needs like groceries. That should be a sign of just how tight consumer budgets are right now, especially with the prospects of inflation looming in the background.

This is a net benefit for an accommodator like Affirm. Which is why, despite trading at only 74% of its 52-week high, Dan Dolev from Mizuho assigned AFRM a $108 price target, 45% above today’s share price and well above the analyst consensus of $80.04.

Rocket Companies: Positioned for a Refinance Wave

The housing market lives and dies by mortgage rates, and Rocket Companies—best known for its Rocket Mortgage platform—is uniquely positioned to capture demand when refinancing picks up.

Millions of new homebuyers took out mortgages in 2023-2024 when mortgage rates reached as high as 7%. Now that rates are set to decline through the end of the year, markets are beginning to factor in a potential surge in refinancing demand. 

Over the past quarter, RKT has rallied by 39.4%, outperforming the S&P 500 index and most of its mortgage peers. 

Yet, some on Wall Street are aware that the potential refinancing increase is far from being fully priced in. Like Bank of America’s Mihir Bhatia, for example, who set a $24 price target, which is well above the consensus price target of $16.65. Bhatia believes the stock has 18% more room to run.