Last week brought some relief to nervous investors when NVIDIA delivered solid earnings and Google unveiled Gemini 3. The AI gold rush seemed back in full swing. But here's the thing about market rallies: two good days don't necessarily make a trend, and when major indices are swinging through large trading ranges, that's usually your first clue that the market isn't exactly brimming with confidence.
Even the usually dependable Magnificent 7 stocks are showing cracks. Amazon (AMZN) and Meta (META) are both struggling as we head into the final stretch of 2025, with market gains increasingly concentrated among a select group of AI players. So the question becomes: does this rally have legs, or is it time to shift into defensive mode before 2026 arrives? The answer probably depends on which sector you're looking at, or even which specific industry within that sector.
The Bank Stock Success Story and the Fintech Struggle
It's been a banner year for traditional banking stocks. JPMorgan Chase (JPM), Goldman Sachs (GS), and Bank of America (BAC) have all posted significant gains in 2025. But when you peel back another layer of the onion, you'll notice that not everything in the financial sector is thriving.
Fintechs—those companies that blend financial services with technological innovation—have struggled mightily to keep pace with the big banks this year. Many have watched their stocks turn sharply south during the second half of the year. With volatility firmly entrenched as the market's baseline condition, these companies are going to be under the microscope. Let's look at five fintechs that are showing particularly troubling signs.
PayPal Holdings: The Long Fall From Grace
PayPal's (PYPL) collapse has been so dramatic that it's almost comical. Shares of the company soared during the post-COVID bull market, rocketing from $85 to $308 in just under 16 months. But like many tech darlings of that era, the descent was even faster. The stock has failed to regain even its COVID-era bottom since topping out in 2022.
Here's what makes the situation particularly interesting: PayPal is still a $56 billion company generating more than $32 billion in annual sales. Its products, like Venmo, are used by billions of people worldwide. But ubiquity doesn't guarantee profitability in the stock market, and PYPL shares continue trending downward despite trading at just 12 times forward earnings—a valuation that would typically scream "value opportunity."
The problem is that PayPal still carries the expectations of a growth stock. Management recently warned of potential Q4 earnings deceleration as the company focuses on growth initiatives. That's not exactly what the market wants to hear right now, and PYPL shares have declined back to tariff "Liberation Day" levels. Shares are trading well below both the 50-day and 200-day simple moving averages, and momentum oscillators like the Relative Strength Index and the MACD indicate the stock is losing even more steam.
Toast Inc.: When Valuation Gets Too Rich
Moving from a large-cap legacy player to a newer entrant, let's talk about Toast Inc. (TOST), which sells point-of-sale platforms and other systems to restaurants. Toast went public in 2021 at the tail end of post-COVID market exuberance, soaring to a $19 billion market cap with a stock price over $65. But the party ended quickly when the broader market turned sour shortly after the company's IPO, and the stock plummeted under $15 per share by June 2022.
Toast experienced something of a renaissance following the 2022 bear market and closed above $45 as recently as August. However, TOST shares have lost serious momentum since breaking that $45 mark, as valuation concerns have emerged for many of 2025's previous winners.
Here's where things get spicy: TOST trades at 85 times forward earnings and 3.5 times sales, with net profit margins of just 4.7%. That's apparently getting a little too rich for this market's taste, and shares have quickly plunged below both the 50-day and 200-day SMAs. Bearish action on the MACD confirms the downtrend, and the RSI still hasn't reached oversold territory. With these headwinds in place, a slow holiday season would likely push TOST shares even lower.
Coinbase Global: Riding Bitcoin's Rollercoaster
If another crypto winter is approaching, you probably don't want to be holding Coinbase (COIN) shares. The stock has tracked Bitcoin's spot price fairly closely throughout 2025. COIN is still clinging to a slight year-to-date gain, but it's down more than 25% over the last month as crypto prices have dipped across the board.
Unlike Bitcoin, though, Coinbase has earnings targets to meet and shareholders to impress. Those shareholders weren't particularly thrilled when the company announced an expected increase in operating expenses during its Q3 2025 earnings report.
The technical picture is also deteriorating. COIN shares had spent most of the year comfortably above the 200-day SMA, but that support level has now broken down. The RSI and MACD are also looking concerning, and it will likely take a sudden Bitcoin reversal to break COIN shares out of this drawdown.
Upstart Holdings: When AI Isn't Enough
Even an AI-infused fintech like Upstart (UPST) can't seem to catch a break in this environment. The company uses a cloud-based AI platform to assess borrowers' creditworthiness, which made it a popular meme stock during the halcyon days of 2021. But to the surprise of very few people, UPST shares lost nearly 90% of their value when the Federal Reserve started its rate-raising program.
The stock began to rebound in 2024 as the company neared profitability, and Upstart has now posted four consecutive quarters of positive earnings per share. However, valuation remains a significant problem. The company trades at more than 170 times earnings, and management provided guidance that fell short of expectations during the November 4th conference call.
UPST shares have been trending steadily downward in a tight channel since the end of July, when post-tariff tailwinds began to fade. A bearish MACD crossover occurred around the same time this price channel formed. The stock will likely need a meaningful catalyst to break out of this downtrend.
Affirm Holdings: Buy Now, Pay Later (For Your Losses)
Affirm (AFRM) is an e-commerce platform that offers Buy Now, Pay Later services, a product that's skyrocketed in popularity over the last few years. AFRM shares have more than tripled since the end of 2023, as consumers continue using the platform to split discretionary purchases into installments.
Like Upstart, the company finally reached profitability earlier this year. But the last two earnings reports showed significant EPS misses versus projections, and the stock appears to be breaking down as analysts reduce their price targets.
The stock recently broke below both the 50-day and 200-day SMAs after spending most of the year using the 50-day as support. The MACD confirmed the trend reversal, and the RSI still hasn't touched the oversold threshold yet. Affirm shares will likely need to retest the 50-day SMA soon to avoid further deterioration, but the technical signals surrounding the stock aren't particularly promising.
The Bigger Picture
What we're seeing across these fintech stocks is a market that's become increasingly selective and less willing to pay premium valuations for companies that aren't delivering consistent growth. While traditional banks benefit from rising interest rates and established business models, fintechs are caught in a challenging position: they need to prove they can generate profits while also investing heavily in growth and technology.
The technical indicators across all five of these stocks point to continued weakness in the near term. Most are trading below key moving averages, momentum oscillators are turning bearish, and none have shown signs of establishing a solid support level. For investors holding these positions, the current market environment suggests caution is warranted. For those considering new positions, waiting for clearer signs of stabilization might be the prudent approach as we head into 2026.
