Top FinTech Stocks Show Beat-and-Raise Potential, Baird Says

Baird analyst David J. Koning identified three financial technology stocks as top ideas heading into second-quarter 2026 earnings, citing solid fundamentals and potential for companies to exceed expectations and raise guidance.

In a July 14, 2026 research note, Baird Equity Research highlighted CPAY, XYZ, and MA as best positioned in the Financial Technology, Payments, and Services sector. The firm noted that all three companies demonstrate organic revenue growth exceeding 10 percent and earnings per share growth of approximately 15 percent or more. Baird suggested that fintech sentiment appears to be improving as trading activity in artificial intelligence stocks has become more volatile, with valuations for these three companies appearing reasonable given their growth profiles.

The backdrop for U.S. payments appears strong, according to the note, with large banks reporting accelerating credit and debit volume growth. All three stocks may benefit from rising interest rates, with XYZ and MA holding fixed debt alongside floating-rate cash, while CPAY’s Corporate Payments unit benefits from higher rates on their float portfolio.

1. CPAY -- Baird sees potential for a second-quarter beat-and-raise scenario, with Street estimates for 2026 earnings per share potentially biased upward by approximately 1 percent. The firm expects second-quarter revenue growth to remain above 10 percent organic on a constant-macro basis, with EPS growth exceeding 25 percent. Corporate Payments, representing roughly 40 percent of total revenue, shows a positive backdrop as Citigroup reported solid accelerating volumes in the second calendar quarter. Baird now expects Corporate Payments growth of around 15 percent in the second quarter, with acceleration likely in the second half. Share buybacks could reduce share count and boost earnings per share, following 2.4 million shares repurchased in the first quarter and an apparent 0.7 million in early second quarter.

Corpay reported first-quarter 2026 earnings and revenue that surpassed analyst expectations and also announced it increased its credit facilities by $1.3 billion. The company has also entered a partnership with BVNK to provide stablecoin settlement capabilities to its customers.

2. XYZ -- Baird anticipates a beat-and-raise outcome, with 2026 earnings per share estimates likely biased upward by 2 to 4 percent. Square gross profit, approximately 35 percent of total, likely accelerates to 11 percent growth from 9 percent in the first quarter. CashApp gross profit, representing roughly 65 percent of total, likely beats Street estimates by approximately 5 percent with 33 percent year-over-year growth. Adjusted EBIT margin likely exceeds expectations due to solid incremental margins and falling stock-based compensation.

In recent developments, Block’s Square unit was selected by Sherwin-Williams as a payment solutions partner and launched integrations with ChatGPT and Claude for sellers. Following these updates, Baird raised its price target on the company to $100.

3. MA -- Baird expects a solid beat-and-raise performance. Second-quarter U.S. volumes accelerated across major banks. The firm believes Street estimates for the second quarter are conservative on cross-border revenue and operating margins based on historical sequential patterns.

Mastercard is reportedly considering the sale of a majority stake in its UK payments subsidiary, Vocalink. Separately, Baird raised its price target on the company to $680, noting expectations for a second-quarter revenue beat.