The Fintech Comeback Story Traders Are Starting to Notice

A major digital payments player is showing signs of a turnaround as AI-powered services and partnerships fuel renewed growth.

After lagging peers for much of the past year, the company is lifting guidance and catching fresh analyst upgrades.

Here’s that and four more on the ETC Sunday Watchlist:

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Nike Inc.

Ticker: NKE | Market Cap: $112.51B | Catalyst: Cost Cuts and Innovation Pipeline

Nike delivered quarterly earnings of $0.96 per share on $12.6 billion in revenue, slightly above Wall Street estimates. While sales growth remains modest, management’s $2 billion cost-cutting program is now driving operating margin improvement. At the same time, Nike is doubling down on its innovation cycle, with launches in performance running and basketball categories designed to capture younger consumers.

Direct-to-consumer revenue is stabilizing after inventory headwinds earlier this year, and digital sales returned to positive growth. Analysts see room for operating leverage to expand further as supply chain expenses ease and new product lines gain traction.
Shares trade at roughly 24 times forward earnings, a discount to historical averages, leaving valuation room if consumer spending strengthens into the holiday season. The near-term catalyst will be evidence of traction in its women’s and digital-first lines, both of which carry higher margins.

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Costco Wholesale Corp.

Ticker: COST| Total Assets: $430.03B | Catalyst: Membership Fee Increase and Earnings Upside

Costco is benefiting from resilient consumer demand and its strong value proposition. In its fiscal fourth quarter, sales rose 8% year over year, with same-store sales up 5% excluding fuel. The company has announced its first membership fee hike in seven years, raising annual costs by $5 to $65 for basic and $10 to $130 for executive memberships.

That incremental revenue could add nearly $500 million annually to Costco’s bottom line, and analysts expect earnings growth to accelerate in the coming year. Membership renewal rates remain above 90%, highlighting customer loyalty even amid higher prices.

The company’s expansion in Asia, particularly in China and Japan, is adding another growth lever. Shares are trading near all-time highs, but the new fee structure and consistent double-digit earnings growth keep Costco well positioned as a long-term compounder.

United Airlines Holdings

Ticker: UAL | Market Cap: $31.46B | Catalyst: Low Fuel Costs and Strong International Bookings

United Airlines has been under pressure this year, with shares down nearly 30%, but recent catalysts suggest potential upside. Lower fuel costs are providing a major tailwind, as jet fuel prices dropped 12% from the prior quarter, translating directly into margin relief. International demand, especially to Europe and Asia, remains robust, with bookings up 14% year over year.

United’s Q2 earnings topped expectations, with EPS of $3.12 versus $2.95 forecast, and management reaffirmed full-year profit guidance despite domestic weakness. The airline’s loyalty program continues to be a steady profit engine, contributing more than $1 billion in high-margin revenue.

Debt levels remain high, but the combination of reduced input costs and international strength could help stabilize earnings. At just 4 times forward earnings, the valuation is attractive if fuel prices stay subdued.

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IBM

Ticker: IBM | Market Cap: $223.01B | Catalyst: AI Software and Consulting Growth

IBM’s pivot toward hybrid cloud and AI is starting to pay off. The company reported second quarter revenue of $15.9 billion, up 6% year over year, led by its software and consulting divisions. Its AI platform, Watsonx, is gaining traction across financial services and healthcare, with more than 500 enterprise customers onboarded in the last six months.

Free cash flow guidance was raised to $12 billion for 2025, giving IBM flexibility to continue buybacks and dividend increases. Its dividend yield of 3.7% remains one of the highest among large-cap tech companies.

While legacy infrastructure sales remain flat, the higher-growth segments are becoming a larger share of the mix. Shares trade at 15 times forward earnings, a modest multiple given accelerating revenue growth and a clear AI strategy. Investors looking for defensive AI exposure may find IBM’s mix of yield and growth appealing.

Block Inc.

Ticker: XYZ | Market Cap: $45.22B | Catalyst: AI-Driven Growth and Raised Guidance

Block has reaccelerated after a difficult 2024. Second quarter results beat expectations with adjusted EPS of $0.45 versus the $0.36 consensus, while gross profit rose 23% year over year. The Cash App ecosystem is now seeing early monetization from integrated AI-driven budgeting and lending tools, which management says could expand lifetime customer value significantly.

Partnerships with Shopify and recent inroads into Latin America provide incremental growth, while Square’s core merchant business is stabilizing after a year of weak small business sentiment. Analysts at JPMorgan and Mizuho have both lifted price targets, citing margin expansion potential and stronger unit economics from AI adoption.

Shares are still down 15% year to date, but recent momentum above the 50-day moving average and improving profit metrics could mark the beginning of a sustained reversal. Investors looking for fintech exposure may find this a favorable entry point if revenue growth continues trending toward the high teens.

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This week’s lineup is about rotation into areas with renewed catalysts and favorable setups.

A fintech comeback, consumer brands leveraging cost discipline and pricing power, an airline with low input costs, and a tech giant finally seeing its AI bet scale all make the list.

Staying early on these kinds of moves can be the difference between catching the breakout and chasing it later.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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