SoFi Technologies (NASDAQ: SOFI) has been a major winner in the past 12 months. Shares are up just over 100% since early June 2024, highlighting how the business is winning over investors in remarkable fashion. But to be fair, it has been a volatile stretch.

This leading digital bank hardly flies under the radar anymore. It's doing a great job bringing on new customers, especially as it continues innovating with new products. Shares currently trade 45% below their peak, though.

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Investors should consider what the future might hold. Where will this top fintech stock be in five years?

Image source: SoFi Technologies.

Becoming a top 10 financial institution

CEO Anthony Noto, who has an impressive background working for the National Football League, Goldman Sachs, and Twitter (now X), has high hopes for his company. "Meeting all of a person's financial needs in one place with world-class products delivered seamlessly and digitally gives us a massive advantage," he said on the 2024 third-quarter earnings call last October. "This is why you will often hear me say it's a matter of when, not if, we become a top 10 financial institution."

It's not exactly clear what metric Noto is focused on with this goal. It could be market cap, revenue, or assets, for example. Nonetheless, it's strikingly clear that SoFi still has a long way to go.

According to Federal Reserve data, the 10th largest bank in the U.S. by assets is State Street. As of March 31, it had $368 billion in total assets on its balance sheet, more than 10 times bigger than SoFi.

It's part of every CEO's job to drive investor excitement. But from Noto's perspective, it's easy to be optimistic about what SoFi could look like in the future. That's because growth has been superb.

The business added 800,000 net new customers last quarter, with the total count approaching 11 million. And SoFi's first-quarter adjusted net revenue of $771 million was more than it brought in for all of 2020.

I'm confident that by 2030, SoFi will be a much larger financial services entity. It should have more customers, more products, higher revenue, and higher profits. Based on the company's success, it's difficult to think any other way.

However, there could still be some risks that affect SoFi's success over the next five years. For one, the culture of product innovation could weaken and pressure customer growth.

What's more, management could loosen up lending standards and its risk management in the name of faster expansion. So far, though, there's nothing concerning, but investors should be mindful of risk factors.

SoFi stock in 2030

As of this writing, this stock trades at a price-to-earnings ratio (P/E) of 34.9. This appears to be an expensive valuation, but there's more to it than meets the eye.

Management believes that profits will soar. It's expected that in 2026, earnings per share (EPS) will be $0.68 at the midpoint. And in the years after that, the company thinks EPS will grow at a compound annual rate of 20% to 25%. Based on these forecasts, EPS will total $1.25 in 2030.

Let's assume the P/E contracts to 23.4 in 2030, which is the current multiple of the S&P 500. I believe this could be a conservative view. Then, we're looking at a stock price of $29.25 at the end of the decade.

Of course, this is a rough estimate, but it shows that SoFi Technologies shares could return 105% in the next five years. No one will argue with that kind of performance.

Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.

Financial services is arguably the most important industry in our economy, as the movement of money, as well as saving and lending activities, is vital for individuals, businesses, and governments. But alongside the massive banks we're all familiar with, there are smaller businesses to pay attention to.

In the past decade, the integration of technology within this sector in an effort to better serve customers has become hard to ignore. And this ongoing trend has investment implications for those looking to put money to work in this area.

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Here are the smartest fintech stocks investors can buy with $500 right now.

Image source: Getty Images.

PayPal

The first fintech enterprise that should be on your radar is PayPal (NASDAQ: PYPL). The business has been at the forefront of digital payments for more than two decades, and it continues to be a leader in the space.

PayPal has 436 million active accounts. During the first quarter, it handled a whopping $1.7 trillion in annualized total payment volume, showcasing its impressive scale. There are multiple segments under the hood, like the PayPal-branded checkout solution, Braintree for merchants, and Venmo. It's the latter that is exhibiting the fastest growth lately, driven by the notable adoption of the Venmo debit card product.

While there is intense competition in the payments landscape, PayPal has carved out a successful niche. That's because it has a strong brand name in the industry that individuals and merchants have come to trust. As a two-sided platform, the business benefits from a powerful network effect.

PayPal's financial situation is robust. The balance sheet is in solid shape, with $15.8 billion in cash, cash equivalents, and marketable securities compared to $12.6 billion in debt. Profitability is worth mentioning, as the operating margin was a stellar 19.6% in Q1. For this full year, the company is expecting to produce $6 billion to $7 billion in free cash flow. The plan is to spend $6 billion just on share repurchases.

The market has soured on this company, as the stock currently trades 77% off its peak from July 2021 (as of June 3). This gives investors a cheap forward P/E ratio of 14 to take advantage of. That's a good deal for a growing and profitable payments leader.

SoFi Technologies

Another fintech stock to buy right now is SoFi Technologies (NASDAQ: SOFI), the budding digital bank that's continuing to register fantastic growth. During the first quarter, the business posted a year-over-year revenue gain of 20% while adding 800,000 net new customers to the mix. As of March 31, SoFi had amassed 10.9 million customers, up tenfold in the past five years.

Clearly, the company's products and services are a hit. That's because SoFi is finding success with a goal that seems to emphasize utilizing technology to provide an exceptional user experience when it comes to handling one's finances. The average customer uses 1.5 different products, so there remains a significant opportunity to cross-sell.

A new development is that SoFi is now firmly profitable. Diluted earnings per share (EPS) totaled $0.06 during Q1, marking the sixth straight quarter of positive generally accepted accounting principles (GAAP) net income. The leadership team believes this is just the beginning. After forecasting $0.68 (at the midpoint) of EPS in 2026, the expectation is for this bottom-line figure to increase at a compound annual rate of between 20% and 25% in the years after.

It won't always be smooth sailing. Something all banks deal with is cyclicality. Should there be an economic downturn in the U.S., it's likely that SoFi's robust growth and improving profitability will take a hit. This should be temporary, though.

As of this writing, investors must be comfortable paying a forward P/E ratio of 49 to add the stock to their portfolios. At first glance, this doesn't look like a bargain deal. However, when you consider the earnings trajectory, the valuation becomes more compelling.

Should you invest $1,000 in PayPal right now?

Before you buy stock in PayPal, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PayPal wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

Market volatility over the past few months could lead investors to sell and take their winnings home before things get worse. But investing success means riding out the short-term waves and holding on to long-term winners. The S&P 500 (SNPINDEX: ^GSPC) has already made up whatever it lost in value earlier this year, and it would have been a shame to have sold at a low and missed out on the quick rebound.

If you can hold on for at least 20 years, you can choose excellent stocks and let them work their magic on your investments. Amazon (NASDAQ: AMZN), Shopify (NASDAQ: SHOP), MercadoLibre (NASDAQ: MELI), and SoFi Technologies (NASDAQ: SOFI) are four monster stocks that should reward you well over the next 20 years.

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Image source: Getty Images.

1. Amazon: E-commerce and AI

Amazon is the leader in e-commerce and cloud computing, two massive growth industries. It has about 40% of the U.S. market share in e-commerce and about 30% of the global market for cloud computing. Both of these industries are growing organically, and Amazon is benefiting from these organic tailwinds.

Shoppers know Amazon as the king of e-commerce, and the company is heavily investing in keeping its lead there. But management has identified generative artificial intelligence (AI), primarily through the Amazon Web Services (AWS) cloud-computing business, as its main growth driver over the next few years.

Amazon said it would invest upwards of $100 billion in 2025 alone to keep building out this business, and it offers a huge assortment of features and tools to every size and stripe of client. AWS itself generated a 17% year-over-year increase in sales in the first quarter and has a $117 billion annualized revenue run rate. Management expects that with generative AI, that rate will increase.

"We thought AWS had the chance to ultimately be a multihundred-billion-dollar revenue run rate business," CEO Andy Jassy recently said of the pre-generative AI opportunity. "We now think it could be even larger."

Advertising and streaming continue to grow and add value to the business, and Amazon is investing in new concepts like Zoox autonomous vehicles and Project Kuiper broadband. It has a huge growth runway, and its stock should keep rewarding investors over many years.

2. Shopify: The other e-commerce giant

You won't see Shopify on any list of highest e-commerce sales because it doesn't sell products, it sells e-commerce services, like websites and payment processing. But its gross merchandise volume (GMV) is similar to Amazon's e-commerce sales, giving you a picture of Shopify's important and dominant position in the e-commerce space.

Shopify is also benefiting from the organic tailwinds of e-commerce growing as a percentage of retail sales. According to eMarketer, e-commerce accounted for 20.3% of retail sales in 2024, and that's expected to increase to 23% by 2027. Even that's still a small percentage, and with each percentage point translating into trillions of dollars, Shopify has a long growth runway.

It also continues to identify new ways to expand its market share and help its clients increase their sales. It has gone from a platform helping small businesses get online to targeting large businesses with individual e-commerce components. It offers a full-service omnichannel platform combining physical and digital retail, and it's making a bigger move into international, where there are several bigger players. International sales only accounted for 30% of the total in Q1, and that could be a huge growth driver in the coming years.

Patient investors should expect Shopify to be a top stock as it keeps growing and innovating for the foreseeable future.

3. MercadoLibre: The Latin American tech disruptor

MercadoLibre is similar to Amazon in that its core business is e-commerce, but it has dipped its toes into several other businesses that are driving fantastic growth. It operates in Latin America and offers a host of digital services in both e-commerce and financial technology. It consistently reports strong growth across metrics, such as a 40% increase in GMV year over year and a 72% increase in total payment volume in the 2025 first quarter.

The opportunity here is enormous because Latin America lags many other global regions in both e-commerce and digital penetration. In fact, 85% of sales are still offline, and some of its regions are underbanked, leading to a greater necessity for digital financial services.

Because its regions are still in their early innings in its industries, there are so many levers MercadoLibre can pull to move growth. It's doing so step by step, bringing in new, unique visitors to its ecosystem and generating higher purchase frequency. It's launching all sorts of innovative services, such as a new, free streaming initiative powered by its growing ad business.

MercadoLibre has a wide-open runway and tons of opportunities to grow its business and stock gains.

4. SoFi: The modern way to bank

SoFi is a digital financial disruptor offering all banking services online. It targets the young professional who's just starting their financial journey and appreciates SoFi's tech focus and easy-to-use interface.

Although its core business is lending, it has successfully expanded into a large array of financial services like bank accounts and investing tools. These are fee-based products that have low costs and are becoming incredibly profitable.

Even the lending business is bouncing back as interest rates go lower, and lending revenue increased 25% year over year in Q1. Financial services, though, more than doubled, and contribution profit increased 299%.

It's adding members at a high rate and generating higher engagement through cross-selling and upselling, and SoFi has a massive growth opportunity over the next 20 years as it gets closer to its ambition of becoming a top-10 U.S. bank.

Should you invest $1,000 in Amazon right now?

Before you buy stock in Amazon, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in MercadoLibre and SoFi Technologies. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Shopify. The Motley Fool has a disclosure policy.

SoFi Technologies (NASDAQ: SOFI) is shifting to a more asset-light business model, which could lessen the risk for investors in its stock.

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*Stock prices used were the afternoon prices of May 25, 2025. The video was published on May 27, 2025.

Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

SoFi Technologies (NASDAQ: SOFI) gave investors critical insights you will not want to miss.

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*Stock prices used were the afternoon prices of May 24, 2025. The video was published on May 26, 2025.

Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

SoFi's (NASDAQ: SOFI) CEO, Anthony Noto, said on the company's first-quarter 2025 conference call that the company will invest heavily in crypto and the blockchain over the next few years. Is SoFi becoming a crypto company? Travis Hoium digs into what we know in this video.

*Stock prices used were end-of-day prices of May 9, 2025. The video was published on May 10, 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $714,958!*

Now, it’s worth noting Stock Advisor’s total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of May 5, 2025

Travis Hoium has positions in Coinbase Global, Robinhood Markets, and SoFi Technologies. The Motley Fool has positions in and recommends Coinbase Global. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Banking disruptor SoFi Technologies (NASDAQ: SOFI) has grown at an impressive pace in roughly four years since it became a publicly traded company. The company's membership base has more than tripled since the end of 2021, SoFi's banking platform has grown from zero at the start of 2022 to more than $27 billion in consumer deposits today, and its adjusted EBITDA in 2024 was about 23 times what it was just three years prior.

Image source: Getty Images.

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Even after this fantastic growth, SoFi remains a relatively small financial institution. It is currently the 63rd largest U.S. bank by assets, according to Federal Reserve data. Not only does it have tons of room to grow its customer base and relationships, but there are also some extremely promising growth drivers that investors should know about.

Is SoFi ready to jump to the next level?

In the first quarter of 2025, SoFi grew its revenue by 33% year-over-year, posted its highest earnings per share yet, and added about 800,000 new members – the most it has ever added in a single quarter.

However, 10.9 million members still gives the company tons of room to grow, and management is doubling down on its brand awareness efforts. As one example to show how small SoFi still is, consider that online financial institution Discover (NYSE: DFS) has about 300 million open accounts.

There are some particularly interesting potential catalysts to keep an eye on:

• The average SoFi member has just 1.4 products with the company. A product is something like a bank account, loan, or credit card. The focus has understandably been on growing the membership base, but this has created massive potential to cross-sell products and services to existing members.
• SoFi is rapidly scaling its third-party loan origination platform, which requires none of its own capital but generates a low-risk, high-margin stream of fee income.
• SoFi's core lending business is personal loans, but its student loan and home loan originations increased by 58% and 54%, respectively, in the most recent quarter. If interest rates start to fall, the home loan segment could be a particularly interesting opportunity, especially when it comes to refinancing, as Americans are sitting on more home equity than ever before.

These are just a few examples. But the point is that there are some big catalysts that could help SoFi continue to grow its business and become more profitable in the coming years.

Can SoFi stock produce life-changing wealth?

With a valuation of 2.9 times tangible book value and about 50 times forward earnings as of this writing, SoFi is not exactly a cheap bank stock. However, considering its momentum and high net interest margin, SoFi could be a massive home run if it can deliver on its growth strategy.

SoFi's management has previously stated that its goal is to grow to the point where it is a top 10 financial institution.

For context, the 10th largest commercial bank in the United States today is TD Bank (NYSE: TD), which has about $373 billion in domestic assets. SoFi has $37.7 billion in total assets, so it would need to grow tenfold in size to break into the top 10 list. (Note: TD is roughly one-tenth the size of the largest U.S. bank, JPMorgan Chase.)

If SoFi were to achieve such scale, the business would probably be a highly valued one. For one thing, SoFi is rapidly building out the asset-light parts of its business, such as the third-party loan platform, and these could conceivably scale to a large size as well. Plus, the nature of SoFi's loan portfolio as well as its low cost structure gives it the potential for a higher return on assets than the typical bank. In fact, every single one of the 10 largest U.S. banks is primarily branch- or office-based.

In other words, if SoFi were to increase tenfold in size, in terms of assets, it would probably command a higher valuation than the other large U.S. banks. Therefore, if management can achieve its goal and reach a top 10 position within the next decade or two, its stock could potentially produce life-changing wealth for investors.

Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Discover Financial Services is an advertising partner of Motley Fool Money. Matt Frankel has positions in SoFi Technologies. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

Companies using technology to disrupt the traditional financial services sector stand to capitalize on a significant growth opportunity. PayPal (NASDAQ: PYPL) and SoFi Technologies (NASDAQ: SOFI) are recognized as fintech leaders that have found success in carving out distinct niches within the evolving landscape.

Despite their volatile stock prices during the past year, both companies' strong product innovation and ongoing expansion efforts position them to reward shareholders over the long run.

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Let's discuss which of these fintech growth stocks is the better buy for your portfolio right now.

Image source: Getty Images.

The case for PayPal stock

With a history spanning more than two decades, PayPal pioneered online payment processing as an early disruptor to legacy banking systems. Today, the company facilitates transactions for 436 million active customers in more than 200 countries. PayPal has evolved by focusing on differentiated and value-added solutions to drive profitability rather than emphasizing user growth and low-margin activities. The strategy appears to be working.

In the recently reported first quarter, even as the number of total payment transactions declined by 7% year over year, the company's key performance metric of total payment volume (TPV) climbed by 3% year over year, generating a 7% increase in transaction margin.

Branded checkout, representing payment experiences where PayPal's brand or the Venmo platform are central to the transaction, has been a key part of the TPV growth. PayPal is also seeing traction in its market with its merchant-oriented payment service provider (PSP) offerings. Even more impressive was the 23% increase in adjusted earnings per share (EPS) compared to the prior-year quarter.

Management expects the trends to continue, targeting full-year transaction margin growth between 4% and 5%, alongside a 6% to 10% increase in adjusted EPS over 2024. Where PayPal shines as a growth stock, and part of its allure as an investment opportunity next to SoFi Technologies, is its attractive valuation. Shares of PayPal trade at a forward price-to-earnings (P/E) ratio of just 13 based on analysts' average estimated 2025 EPS. That's well below SoFi's forward P/E of 44.

Investors confident in PayPal's ability to further consolidate its payments market share have ample reasons to buy and hold the stock for the long run.

PYPL PE Ratio (Forward) data by YCharts.

The case for SoFi Technologies stock

SoFi Technology's $14 billion market capitalization makes it smaller compared to PayPal's $65 billion valuation, yet it offers faster growth in a more lucrative fintech segment.

The company stands out with a comprehensive approach to personal finance, turning its expertise in lending products -- such as personal loans and mortgages -- into a one-stop shop for financial services. SoFi's ability to cross-sell to its 10.9 million-strong membership base across a broader range of products, including banking accounts, credit cards, and investing options, has translated into a rapidly expanding and diversified technology platform.

In the first quarter, net revenue surged by 33% from a year earlier in what management described as a "tremendous start to 2025." Perhaps the biggest development for SoFi is its ongoing diversification beyond lending products into more fee-based financial services, which now represent 41% of the business, up from 37% last year. This is important as it supports more durable earnings and high-quality cash flow, compared to the credit risk exposure from its loan portfolio. Indeed, profitability is accelerating, with management targeting full-year adjusted EPS between $0.27 and $0.28, nearly double the $0.15 result in 2024.

Ultimately, SoFi's outlook helps justify the valuation premium its shares command. Investors who believe SoFi represents the future of banking and remains in the early stages of fulfilling its platform potential will be hard-pressed to find a better fintech growth stock to own.

Decision time: The edge to SoFi

Although I predict shares of PayPal and SoFi Technologies will both climb higher during the next year and beyond, my choice for the better growth stock is clear. SoFi's combination of rapid platform membership growth and earnings momentum should allow its stock to outperform in a resilient macroeconomic environment. A few more quarters with financial results exceeding expectations could be the key for SoFi stock to reclaim its previous highs, making it a compelling buy-the-dip opportunity for investors to consider adding to diversified portfolios.

Should you invest $1,000 in PayPal right now?

Before you buy stock in PayPal, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PayPal wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

Shares of SoFi Technologies (NASDAQ: SOFI) are up an impressive 70% in the past 12 months. However, they have been extremely volatile. As of April 25, they trade 28% below their 52-week high.

Investors won't struggle to find reasons to like this digital banking powerhouse that's aiming to disrupt a massive industry. It's developing competitive strengths and still has a lot of growth potential.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Here's why this fintech stock could be a no-brainer buy in April.

SoFI is looking at a huge goal

"It's a matter of when, not if we become a top 10 financial institution," CEO Anthony Noto said on the third-quarter 2024 earnings call. Noto could be referring to market cap, total assets, or even revenue. Regardless of what metric he's focused on with that ambitious goal, it's clear that SoFi still has a long runway for growth. That's impressive in what is considered to be an extremely mature industry.

SoFi continues to win over customers with its fully digital platform. There are no physical bank branches to invest in and maintain. This allows the leadership team to prioritize providing a superior tech-driven user experience. SoFi's customer base has expanded by 10-fold just in the last five years. This indicates the company's offerings, like checking/savings accounts, various loans, and investment brokerage, are resonating strongly with consumers.

According to Wall Street consensus analyst estimates, SoFi's revenue is projected to increase at a compound annual rate of 18.5% over the next three years.

The customer base is growing, and there is a significant opportunity to cross-sell products. For example, someone who has a checking account with SoFi could eventually take out a loan. And it helps that the business typically brings on a younger demographic that has greater lifetime value.

Building competitive strengths

Companies with an economic moat are considered high-quality because they can defend themselves against the constant threat of competition. Dominant financial services entities, like JPMorgan Chase and Bank of America, fit this category. They typically benefit from switching costs and a cost advantage.

Founded in 2011, SoFi is still a newbie in the industry. However, it's trending in the right direction in terms of developing durable competitive strengths. Customers will deal with switching costs as time passes and they sign up for more products from SoFi. Of course, this depends on the business continuing to expand its offerings to cater to a variety of customers' financial needs.

As mentioned, SoFi doesn't have a physical retail presence, which can lower overhead costs. Some of its biggest expense categories are, unsurprisingly, technology and product development, and sales and marketing. Investors shouldn't want the leadership team to pare back in these areas as it would likely stunt growth. But as revenue continues to grow, SoFi should see some operating leverage, which can lead to an improving bottom line.

Banking on higher profits

Adding to that last point, SoFi is already showing signs of improvement. It posted $0.46 in earnings per share (EPS) in 2024, the company's first year of GAAP profit. And management expects to make major strides in building on this success.

SoFi's 2026 EPS is forecast to total $0.68 (at the midpoint) in 2026. In the years following, the business should see annualized growth of 20% to 25%. It's usually wise to take any executive team's financial forecasts with a grain of salt, but based on the positive factors discussed, it's easy to be optimistic in this situation.

The stock trades at $12.89 today (April 25). Based on the EPS estimate for 2027 of $0.83, this implies a three-year forward P/E of 15.5. That looks like a reasonable deal to buy this rising fintech enterprise.

Should you invest $1,000 in SoFi Technologies right now?

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In this video, I will go over my first-quarter SoFi Technologies (NASDAQ: SOFI) earnings prediction and recent updates about the company. Watch the short video to learn more, consider subscribing, and click the special offer link below.

*Stock prices used were from the trading day of April 24, 2025. The video was published on April 24, 2025.

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Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

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Neil Rozenbaum has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

To say that SoFi (NASDAQ: SOFI) has shown impressive momentum in the few years since it went public would be an understatement. In the three-year period including 2022, 2023, and 2024, SoFi's membership base nearly tripled, and its bank grew from $0 in deposits (it got its banking charter in early 2022) to nearly $26 billion.

There are plenty of impressive numbers throughout SoFi's results that are important to watch. The growth in its third-party lending platform, as well as the progress made by the Galileo technology platform are two big examples.

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However, there's one unconventional metric that is especially important for SoFi's success, especially when it comes to growing its bottom line.

SoFi's productivity loop

One metric that SoFi reports with its earnings is the ratio of financial services products to loans in its ecosystem. Financial services products include SoFi's bank accounts, investment accounts, and credit cards.

SoFi aims to create what it calls a "financial services productivity loop," and growth in the financial services side of its business is the main way it plans to get there.

Here's how this metric has evolved over time:

Data source: SoFi.

Here's why this is important. SoFi's customer acquisition costs have been high for some time. It regularly offers bonuses of $300 or more for members referring someone for personal loans, for example.

However, a larger proportion of financial services customers means that SoFi has more of a natural marketing funnel to cross-sell loan products to its existing customers. Right now, with high economic uncertainty and elevated interest rates, demand for consumer loans (especially mortgages) is low. But as this changes, a high ratio of financial services customers sets the company up to take advantage of loan opportunities in a more efficient manner.

Should you invest $1,000 in SoFi Technologies right now?

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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $566,035!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $629,519!*

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Matt Frankel has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The financial market made a quick recovery this week with some of the more volatile names in the industry leading the way. Wenesday's news that tariffs (outside of China) would be delayed by 90 days led to some optimism and even weak economic data late in the week didn't put a damper on the market.

According to data provided by S&P Global Market Intelligence, shares of SoFi Technologies (NASDAQ: SOFI) jumped as much as 11.3% this week, KKR (NYSE: KKR) was up 9.2% at its peak, and Capital One Financial (NYSE: COF) rose 7.4%. The stocks are up 10.6%, 7.5%, and 6%, respectively, as of 2:30 p.m. ET.

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Bouncing off a low

To be fair, the moves this week are compared to last week's market collapse. Shares are still down from the beginning of April, only 11 days ago, and have all fallen so far in 2025.

SOFI data by YCharts

With that perspective, it's hard to call this a durable rally. But investors were betting this week that a delay in some tariffs and potential deals on others would reduce the risk of a recession and therefore defaults on the debt companies like SoFi and Capital One have on their balance sheets. KKR's rise was clearly because asset values are up, and that's a big part of their fee structure.

While the short-term risk may be seen as lower than a few days ago, there are still more risks today than early this year as economists ramp up their expectations for a recession. And making matters worse is the rise in interest rates this week that could make it more costly for companies, consumers, and even the government to refinance debt. Oh, and the dollar is dropping, too.

Taking a step back

Long-term investors will want to take this opportunity to look at the long-term trends in the market and economy. So far in 2025 consumer confidence is down, tariffs and expectations for inflation are up, and interest rates are rising.

Those factors don't bode well for the economy or financial firms, so it'll be a matter of who will survive and thrive through upcoming market turbulence. I don't think we're in for major losses on loans at this point, but the risks for financial companies are leveraged compared to most stocks based on their business models, so earnings and guidance will be worth watching closely.

Ignore the volatility

As these stocks rise and fall rapidly, it's important for investors to keep in mind the long-term goal, which is to buy opportunistically when the market is thinking short-term. I think these companies will be able to manage risks better than what the market saw during the financial crisis and while the recovery may not be smooth I'm starting to dollar-cost average at lower prices. Long-term, any big dips are opportunities for investors.

Should you invest $1,000 in SoFi Technologies right now?

Before you buy stock in SoFi Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

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Travis Hoium has positions in SoFi Technologies. The Motley Fool has positions in and recommends KKR. The Motley Fool has a disclosure policy.