| Wall Street’s worst nightmare fits between two fingers |
Buy now, pay later stocks (BNPL) are still explosive.
For one, from a market valuation of about $560 billion in 2025, the BNPL market is expected to rally to more than $1.4 trillion by 2028.
Two, Americans are taking on substantial amounts of debt. In fact, Americans are seeing total household debt reaching a record high of $18.59 trillion in the third quarter of 2025.
Three, more Americans are turning to buy now, pay later borrowing.
According to the CBS News, “A growing number of consumers are taking out ‘buy now, pay later,’ or BNPL, loans to cover everyday living expenses, data shows, a sign of the precarious financial state facing many U.S. households. A quarter of Americans now use BNPL loans to pay for groceries, up 14% from last year, according to a recent survey from LendingTree.”
In addition, “Americans spent $1.03 billion on Cyber Monday alone using buy-now-pay-later services like Klarna (KLAR), Affirm (AFRM) and PayPal (PYPL) - an all-time high, according to new data from Adobe - and that figure is expected to go even higher,” according to Morningstar.
So, it comes as no surprise that BNPL stocks are still exploding higher.
Look at Affirm Holdings (AFRM)
Since bottoming out at around $35 in April, AFRM now trades at $71.81, with plenty of upside potential remaining thanks to the BNPL boom and strong earnings.
In its most recent quarter, AFRM EPS of 23 cents beat estimates by 12 cents. Revenue of $933.34 million, up 33.6% year over year, beat by $49.98 million. Also, during the quarter, AFRM extended its US agreement with Amazon through January 2031.
Even better, gross merchandise volume (GMV) jumped 42% to $10.8 billion. Direct to consumer jumped 53% to $3.2 billion. Active users jumped 24% to 24.1 million. And its active merchant count jumped 30% to 419,000 as of late September.
iShares FinTech Active ETF (BPAY)
Or, if you’d rather diversify at a lower cost, there’s the iShares FinTech Active ETF (BPAY).
With an expense ratio of 0.66%, the ETF offers exposure to technology disruption around the world and across multiple areas in finance, such as payments, banking, investments, insurance and software. Some of its 37 holdings include PayPal, Charles Schwab, Capital One, Synchrony Financial, Block, and Global Payments.
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Written by Ian Cooper