The AI gold rush returned with a flourish last week as solid earnings from NVIDIA and Google's Gemini 3 calmed jittery investors. However, two big up days don't make a rally, and the large trading ranges in major indices usually aren't signs of a confident market.
Even some members of the typically reliable Magnificent 7, like AMZN and META, are struggling as 2025 comes to a close, with gains continuing to go to a higher concentration of AI players. Does the rally have another run in it, or is it time to get defensive ahead of 2026? The answer likely depends on the sector you're investigating, or even the industry within that particular sector.
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It's been a successful year for bank stocks with JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), and Bank of America (NYSE:BAC) all posting significant gains in 2025. But peeling back another layer of the onion shows that not all is well within the sector.
Fintechs, companies that combine financial services with technological innovation, have struggled to keep pace with the big banks this year, and many have seen their stocks turn south in the second half of the year. With volatility here to stay, these companies will be under the microscope.
PayPal Holdings Inc.
PayPal's (NASDAQ:PYPL) collapse has been so stark that the New York Mets are trying to sign it to a long-term extension. Shares of the company soared during the post-COVID bull market, jumping from $85 to $308 in just under 16 months. But like many tech darlings of that era, its dropoff was even more swift, and the stock has failed to regain even its COVID bottom since topping out in 2022. PayPal is still a $56 billion company generating more than $32 billion in annual sales, and its products, like Venmo, are used by billions of people worldwide. But ubiquity doesn't guarantee profitability in the stock market, and PYPL shares are still trending down despite trading at just 12 times forward earnings.
PayPal still has the expectations of a growth stock, and management warned of potential Q4 earnings deceleration as it focuses on growth initiatives. This isn't news the market wants to hear, and PYPL shares have declined back to tariff "Liberation Day" levels. Shares are now well below the 50-day and 200-day SMAs, and momentum oscillators like the Relative Strength Index (RSI) and the MACD show the stock losing even more steam.
Toast Inc.
Moving from a large-cap legacy play to a newer entrant brings us to Toast Inc. (NYSE:TOST), which sells its point-of-sale (POS) platform and other systems to restaurants. Toast went public in 2021 at the end of the post-COVID market exuberance, soaring to a $19 billion market cap with a stock price over $65. But it was a short-lived bull run as the market turned sour shortly after the company went public, and the stock dropped under $15 a share by June 2022. Toast has experienced a renaissance since the 2022 bear market, and closed above $45 as recently as August.
However, TOST shares have lost serious momentum since breaking the $45 mark, as valuation concerns have come into play for 2025's previous winners. 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, and shares have quickly plunged below the 50-day and 200-day SMAs. Bearish action on the MACD confirms the trend, and the RSI still hasn't reached Oversold territory. With these headwinds, a slow holiday season would likely drive TOST shares even lower.
Coinbase Global Inc.
If another crypto winter is on the horizon, you likely won't want to hold Coinbase (NASDAQ:COIN) shares, as the stock has tracked Bitcoin’s spot price fairly closely in 2025. COIN is still holding on to a slight year-to-date (YTD) gain, but it’s down more than 25% over the last month as crypto prices have dipped across the board. And unlike Bitcoin, Coinbase has earnings targets to meet and shareholders to impress, and these shareholders weren't particularly thrilled when the company announced an expected increase in operating expenses during its Q3 2025 earnings report.
Technical trends also point to a worsening picture. COIN shares had spent most of the year above the 200-day SMA, but that support level has now broken down. The RSI and MACD are also looking ugly, and it will likely take a sudden Bitcoin reversal to break COIN shares out of this drawdown.
Upstart Holdings Inc.
Even an AI-infused fintech like Upstart (NASDAQ:UPST) can't catch a break right now. 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, UPST shares lost nearly 90% of their value when the Fed started its rate-raising program. The stock began to rebound in 2024 as the company neared profitability and Upstart has posted four consecutive quarters of positive EPS. However, valuation remains a problem, with the company trading 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 as this price channel. The stock will likely need a catalyst to break out of this downtrend.
Affirm Holdings
Affirm (NASDAQ:AFRM) is an e-commerce platform that offers Buy Now, Pay Later (BNPL) 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 to use the platform to split discretionary purchases into installments. Like Upstart, the company finally reached profitability earlier this year. The last two earnings reports, however, 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 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 promising.
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