Buy 5 Financial Technology Giants Amid Fed’s Low-Interest-Rate Regime

On Sept. 17, the Fed in its FOMC meeting decided on a much-hyped 25-basis-point cut in the benchmark lending rate to reduce it to the range of 4-4.25%. This is the first interest rate cut of this year. Moreover, the Fed’s dot-plot has shown two more rate cuts of 25 basis points each this year and one rate cut of 25 basis points in both 2026 and 2027.

The performance of the financial technology (fintech) space is inversely related to the movement of interest rate. A low-interest-rate regime will be beneficial for this space as a higher interest rate significantly affects technological improvement and product innovation of fintech companies.

Fintech’s innovative nature positions it as a fascinating choice in the evolving financial landscape. With the expansion of mobile and broadband networks, fintech is poised for significant growth. The rise of artificial intelligence (AI) technologies and machine learning further revolutionizes banking, payments, and investments, offering efficient and secure financial solutions.

At this stage, we recommend investing in five financial technology bigwigs with a favorable Zacks Rank. These are: CoStar Group Inc. CSGP, PayPal Holdings Inc. PYPL, SoFi Technologies Inc. SOFI, Interactive Brokers Group Inc. IBKR and Robinhood Markets Inc. HOOD. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks in the past three months.

Image Source: Zacks Investment Research

Zacks Rank #2 CoStar Group is benefiting from a resilient subscription business and a strong portfolio of marketplaces including Apartments.com, LoopNet, and Homes.com, which is attracting significant traffic. CSGP’s Global traffic reached 141 million in second-quarter 2025. Strong performance in international markets and the successful integration of acquisitions like STR and Matterport were a plus.

CSGP’s new product launches such as Matterport 3D tours and AI voice search enhance customer experience. CSGP’s solid balance sheet remains attractive. Internationally, strong growth in the U.K. and the Domain acquisition in Australia enhances global reach.

CoStar Group has an expected revenue and earnings growth rate of 18.1% and 21.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% in the last 30 days.

Zacks Rank #2 PayPal Holdings is benefiting from robust growth in total payment volume. Strengthening customer engagement on PYPL’s platform is a major positive. Venmo’s improving monetization efforts and rising adoption rate across various platforms are aiding total active accounts growth.

The solid momentum of core peer-to-peer and PayPal Checkout experiences is a tailwind. Well-performing merchant services are also a positive. Strengthening presence in both the United States and international markets is contributing well. Accelerating transaction revenues of PYPL are likely to continue driving the top line.

PayPal is significantly leveraging AI across its platform to enhance fraud detection, personalized experience and operational efficiency. PYPL’s agentic AI ecosystem enables the company to simplify and streamline integration across all its services.

PayPal Holdings has an expected revenue and earnings growth rate of 4% and 12.5%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 0.2% in the last 30 days.

Zacks Rank #2 SoFi Technologies positions itself as a leader, leveraging its online banking services and the Galileo platform to expand its market presence. Lower interest rates provide a favorable environment for SOFI’s lending business, encouraging customer growth through competitive loan and refinancing options. SOFI’s focus on innovation, including new product launches and strategic partnerships, bolsters its reputation as a forward-thinking competitor to traditional banks.

SOFI’s student loan-refinance business stands out due to less generous loan-forgiveness policies under the Trump administration. Stricter forgiveness criteria may prompt borrowers to seek refinancing options to lower repayment costs, creating opportunities for SoFi to expand its customer base.

SoFi Technologies has an expected revenue and earnings growth rate of 31.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 0.3% in the last seven days.

Zacks Rank #2 Interactive Brokers Group’s efforts to develop proprietary software, lower compensation expenses relative to net revenues, enhance its emerging market customers and global footprint, along with relatively high rates, are expected to continue aiding revenues. We project total net revenues (GAAP) to see a CAGR of 6.5% by 2027. IBKR’s initiatives to expand its product suite and the reach of its services will support financials.

IBKR has been undertaking several measures to enhance its global presence. In August 2025, it launched zero-commission U.S. stock trading in Singapore. In July, it launched NISA accounts to help Japanese investors build wealth tax-free.

In May, IBKR extended the trading hours for Forecast Contracts to nearly 24 hours a day. In April, IBKR launched the prediction markets hub in Canada to capitalize on the rising demand for event contracts.

Interactive Brokers Group has an expected revenue and earnings growth rate of 8.9% and 11.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.5% in the last 60 days.

Zacks Rank #1 Robinhood Markets operates a financial services platform in the United States that allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin and other cryptocurrencies using its Robinhood Crypto platform.

Given the higher retail participation in markets, HOOD’s trading revenues are expected to improve in the near future. Buyouts and product diversification efforts to become a leader in the active trader market will likely bolster its financials.

HOOD’s second-quarter 2025 results were aided by solid trading activity and growth in net interest revenues. HOOD’s vertical integration will likely enhance its product velocity. Further, a robust liquidity position will help HOOD to sustain share repurchases.

Robinhood Markets has an expected revenue and earnings growth rate of 35.4% and 41.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 60 days.

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