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These 2 Top Nasdaq Fintech Stocks Are Playing to Win

By Dan Caplinger – Jun 10, 2021 at 2:30PM

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Find out what lifted their share prices on Thursday.

The Nasdaq stock market prides itself on having so many companies that focus on innovation choose to list their shares on its exchange. Many of the biggest technology companies on the planet call the Nasdaq home, and the moves they make have a huge influence on the Nasdaq Composite (^IXIC 0.00%). On Thursday, the Nasdaq was back above the 14,000 level as of 1 p.m. EDT as it tries to make its way to new record levels.

However, pure tech stocks aren't the only big winners on the Nasdaq. Lately, companies working in the fintech arena have started to come into their own. A couple of those companies, Affirm Holdings (AFRM -3.60%) and MercadoLibre (MELI -4.12%), were making waves on Thursday, and long-term investors can see a lot of reasons to like the two stocks and their fintech exposure.

A couple in front of a computer in a home, with one person holding a credit card.

Image source: Getty Images.

Buy now, pay later -- everywhere

Shares of Affirm Holdings were up nearly 5% early Thursday afternoon. The company specializes in allowing retailers to offer installment payment plans for purchases of all sorts -- even relatively small ones -- and it has been making major strategic moves to try to expand its availability and build up a first-mover advantage.

The latest win for Affirm came from a deal with e-commerce giant Shopify (SHOP 0.67%). Under the broader agreement, Shopify is making Affirm's payment service available to merchants across the U.S. market.

The decision to expand what had been a slightly more limited arrangement between Shopify and Affirm makes sense for both companies. For Shopify, having installment payments available helped to drive thousands of new merchants to sign up with Shopify's service. Meanwhile, getting the vote of confidence from a key player in e-commerce was beneficial for Affirm as well, especially as it seeks to diversify its merchant exposure.

Affirm's business is deceptively simple, and there will definitely be competition. Yet by doing as much as it can to grow quickly right now, the company is looking to set the stage for making itself the best-known name in installment payments. That could make a big difference in the long run.

Looking south

Meanwhile, shares of MercadoLibre were up almost 4% on Thursday. The Latin American e-commerce company is well known for its online marketplace, but its fintech expertise is playing a big role in its overall growth.

The MercadoLibre corporate umbrella includes many different services, and the Mercado Pago electronic payments business is one of the biggest. Built initially to help facilitate online transactions on the MercadoLibre marketplace, Mercado Pago is now seeing a rising number of payments that occur completely independently from the e-commerce side of the business.

Moreover, MercadoLibre is also looking to stay ahead of the game in other areas of fintech. The online retailer bought cryptocurrency recently, joining the growing list of companies making investments there. Crypto has a different kind of appeal in MercadoLibre's core markets, because Latin American governments have a history of devaluing local currencies and suffering rampant inflationary pressure that makes holding regular money risky.

MercadoLibre's move today is nice, but the stock is still more than 30% off its all-time highs. That leaves a great opportunity for those who think the Latin American e-commerce giant is poised for a full rebound.

Dan Caplinger owns shares of MercadoLibre and Shopify. The Motley Fool owns shares of and recommends MercadoLibre and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Affirm Holdings, Inc. Stock Quote
Affirm Holdings, Inc.
$19.28 (-3.60%) $0.72
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$11,066.81 (0.00%) $0.00
Mercadolibre, Inc. Stock Quote
Mercadolibre, Inc.
$815.01 (-4.12%) $-34.99
Shopify Inc. Stock Quote
Shopify Inc.
$28.76 (0.67%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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