"The public fintech sector entered 2026 with momentum, but the first quarter turned sharply as the Iran war drove energy inflation, reversed rate-cut expectations, and pushed investors into a risk-off posture."
"With 18% of the sector's market cap being wiped out and median cohort returns ranging from -13% to -35.3%, fintech significantly underperformed the broader market in Q1."
"BNPL stocks came under pressure as investors pulled back from high-growth, credit-sensitive business models amid rising inflation concerns and fading expectations for interest-rate cuts."
"Klarna Group fell 54% in Q1 2026, while Affirm Holdings lost 38% over the same period, reflecting the broader trend of declining fintech valuations."
In the first quarter of 2026, fintech stocks experienced broad declines as investors shifted away from growth-oriented names in response to macroeconomic uncertainties. The sector's valuations fell sharply, with median cohort returns ranging from -13% to -35.3%. Freedom Holding Corp. was a notable exception, with a nearly 17% increase in shares due to its diversified business model. The decline was attributed to rising inflation and changing investor sentiment, particularly affecting credit-focused BNPL providers and payment platforms.
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