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Dear Fellow Investor,
Two Hot BNPL Stocks to Buy and Hold Every Holiday Season
Buy now, pay later (BNPL) stocks remain one of the most compelling growth stories in today’s consumer finance market—particularly during the holiday shopping season.
Despite periodic concerns about consumer debt, inflation, and interest rates, BNPL adoption continues to accelerate. For investors, that combination of rising demand, expanding market size, and improving profitability has created a powerful tailwind for select BNPL-related stocks.
Here are three key reasons why BNPL is still explosive—and two smart ways investors can position themselves to benefit.
Why the BNPL Boom Is Far From Over
1. A Massive and Rapidly Expanding Market
The BNPL industry is growing at an extraordinary pace. From a market valuation of roughly $560 billion in 2025, the global BNPL market is expected to surge past $1.4 trillion by 2028. That kind of growth is rarely linear—and it creates recurring opportunities for investors who identify strong platforms early.
What’s driving the expansion? BNPL services appeal to both consumers and merchants. Consumers gain flexibility and transparency compared to traditional credit cards, while merchants benefit from higher conversion rates, larger average order values, and increased customer loyalty. As more retailers integrate BNPL options at checkout, usage continues to compound.
Holiday shopping seasons, in particular, act as accelerants. Consumers facing stretched budgets often rely on installment-based payments to manage large seasonal purchases, pushing BNPL volumes sharply higher in the fourth quarter.
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2. Americans Are Carrying Record Levels of Debt
Consumer behavior is also reinforcing BNPL’s growth trajectory. According to the Federal Reserve, total U.S. household debt reached a record $18.59 trillion in the third quarter of 2025. Rising costs for essentials like housing, food, and energy have forced many households to seek flexible financing solutions just to maintain spending.
Rather than turning exclusively to high-interest credit cards, more consumers are opting for BNPL products that clearly outline repayment schedules and, in many cases, offer zero-interest installments. For financially stretched households, BNPL has become less of a luxury and more of a budgeting tool.
3. BNPL Is Being Used for Everyday Essentials—Not Just Big Purchases
BNPL is no longer limited to discretionary purchases like electronics or fashion. According to CBS News, a growing share of Americans are now using BNPL loans to cover everyday living expenses.
“A quarter of Americans now use BNPL loans to pay for groceries, up 14% from last year, according to a recent survey from LendingTree.”
That shift is critical. It suggests BNPL has moved from a niche financing option to a mainstream payment method embedded in daily consumer behavior. Once adoption reaches that stage, usage tends to persist—even during economic slowdowns.
The trend was also evident during the most recent holiday shopping season. According to Morningstar, Americans spent $1.03 billion on Cyber Monday alone using BNPL services such as Klarna, Affirm, and PayPal—an all-time high. That figure is expected to grow further as BNPL providers expand partnerships with major retailers.
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Stock #1: Affirm Holdings (SYM: AFRM)
One of the most direct ways to capitalize on the BNPL boom is Affirm Holdings (SYM: AFRM).
After bottoming near $35 in April, AFRM has staged an impressive rally and recently traded around $71.81. Even after that run, the company appears well-positioned for further upside as BNPL adoption accelerates and profitability improves.
Strong Earnings Momentum
Affirm’s most recent quarterly results reinforced investor confidence:
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Earnings per share: $0.23, beating estimates by $0.12
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Revenue: $933.34 million, up 33.6% year over year, beating estimates by nearly $50 million
These results highlight not only revenue growth but also improved operating leverage as Affirm scales its platform.
Amazon Partnership Extends Visibility
One of the most significant developments was Affirm’s decision to extend its U.S. agreement with Amazon through January 2031. That partnership provides long-term transaction volume, brand credibility, and recurring user engagement—three factors Wall Street values highly in fintech platforms.
Explosive User and Merchant Growth
Operational metrics were equally impressive:
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Gross merchandise volume (GMV): Up 42% to $10.8 billion
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Direct-to-consumer GMV: Up 53% to $3.2 billion
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Active users: Up 24% to 24.1 million
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Active merchants: Up 30% to 419,000
These figures indicate Affirm is not just riding macro trends—it is actively gaining market share. As holiday shopping ramps up each year, Affirm’s growing ecosystem gives it multiple avenues for compounding growth.
Alternative Option: iShares FinTech Active ETF (SYM: BPAY)
For investors who prefer diversification over single-stock exposure, the iShares FinTech Active ETF (NYSEARCA: BPAY) offers a compelling alternative.
Rather than betting on one BNPL provider, BPAY provides broad exposure to financial technology disruption across payments, banking, lending, and financial software.
Why BPAY Makes Sense
BPAY’s portfolio includes a mix of established financial leaders and emerging fintech players. Key holdings include PayPal, Charles Schwab, Capital One, Synchrony Financial, Block, and Global Payments—many of which directly or indirectly benefit from BNPL growth and digital payments adoption.
This diversified approach reduces company-specific risk while still allowing investors to participate in the structural shift toward digital finance and alternative lending models.
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Are there any other seasonal holiday stocks you're buying right now? What other sectors of the market are you currently interested in? Hit "reply" to this email and let us know your thoughts!
