Hello, Fintech Friends!

In my previous column in June, I warned that under the surface, public fintechs were not OK. The second quarter earnings season has proved me right, only it’s turning out even worse than I expected. The TWIF Index is badly underperforming both the S&P 500 and the Nasdaq, and the gap is widening.

FICO, FIS, Fiserv, PayPal, Coinbase, and even Block, which seemed to be finally reaccelerating growth, all took hits after reporting earnings. Card schemes are still holding up well, but have begun to underperform the broader indices. There are isolated pockets of strength in areas like lending. And then there are the true standouts, like Robinhood and Shopify, both big wins for Cathie Wood, whose ARK Fintech Innovation fund also holds Circle, Bitcoin, and... Palantir.

Fintech companies are still innovating, winning market share, and growing earnings, and many have balance sheets strong enough to fuel further growth or survive a downturn. So why does this earnings season feel like winter for fintech? Why the concern? What is the market seeing that I can’t?

Jevgenijs
p.s. Have feedback? Ping me on X/Twitter
Happy to hear how we can improve this column!

Best-Performing Fintech Stocks

Most likely, but by the time this column is published, Robinhood (NASDAQ: HOOD) will become the best-performing Fintech stock this year. What a run!

Performance by Segment

Key Highlights

FICO (NYSE: FICO)