A long-term Amazon partnership gives investors fresh confidence in Affirm’s outlook.
Shares of Affirm Holdings (AFRM) surged after the company confirmed a major milestone: the renewal of its buy now, pay later partnership with Amazon through 2031. The update, shared during an investor meeting, helped push the stock toward recent highs and refocused attention on Affirm’s long-term growth story.
Key Points
- Affirm extended its Amazon partnership through January 2031 on largely unchanged terms
- Shares jumped as investors welcomed stability and long-term visibility
- Strong revenue growth, improving profitability, and steady credit trends support the bullish case
Why Is Affirm Stock Moving Higher?
Affirm stock rallied after executives confirmed that its partnership with Amazon (AMZN) has been extended for another five years. While management did not disclose specific contract details, they described the renewal as a “win-win” that keeps Affirm deeply integrated into Amazon’s U.S. checkout experience.
This partnership has been one of Affirm’s most important growth drivers since it launched in 2021. Amazon gives Affirm access to millions of shoppers already in buying mode, translating into consistent transaction volume. Investors reacted positively because the extension removes uncertainty around a key relationship and provides revenue visibility well into the next decade.
Is Affirm Still Undervalued After the Rally?
Even after the recent surge, some investors believe Affirm still has room to run. Shares recently traded around the mid-$70s, while several analyst estimates and valuation narratives point closer to the low-to-mid $90s. In simple terms, that suggests the market may not be fully pricing in Affirm’s future growth.
At the same time, valuation remains a key debate. Affirm trades at a high earnings multiple compared with traditional financial firms, meaning expectations are already elevated. If growth slows or competition intensifies, the stock could face pressure. That leaves less margin for error, especially in a volatile fintech environment.
How Is Affirm’s Core Business Performing?
Operationally, Affirm’s business appears steady. Revenue is growing at more than 30% year over year, and the company recently reported a positive GAAP operating margin of 7%. For everyday investors, that signals Affirm is no longer just growing fast—it is also beginning to operate profitably.
The Affirm Card continues to gain traction, expanding usage beyond online retail into offline spending. Management aims to grow active cardholders to 10 million over time and increase average annual spending per user. Credit performance has remained stable, with delinquency rates in line with historical levels, even as consumers look to stretch their budgets.
What It Means for Investors
For investors who analyze stocks with a growth mindset, Affirm’s Amazon renewal strengthens its long-term foundation. The deal reinforces Affirm’s role as a leading BNPL provider and supports continued gains in transaction volume and customer acquisition. It also highlights why many see Affirm as one of the best company investments within fintech.
Still, risks remain. The BNPL sector is sensitive to economic conditions, and a weaker labor market could increase credit losses if consumers struggle to repay loans. Competition from rivals such as PayPal and Klarna remains intense, keeping pressure on margins and pricing.
Overall, Affirm now sits at an interesting crossroads. The stock’s momentum and improving fundamentals may appeal to those seeking best stocks to buy for growth, but patience and risk tolerance are essential.
Conclusion
Affirm’s renewed Amazon partnership through 2031 marks a critical vote of confidence in its platform and strategy. While valuation concerns linger, steady execution, strong growth, and long-term visibility keep Affirm firmly on the radar for investors following fintech and digital payments.
FAQs
Why did Affirm stock rise recently?
Shares jumped after Affirm confirmed it extended its partnership with Amazon through January 2031, easing concerns about a key growth driver.
How important is Amazon to Affirm’s business?
Amazon is one of Affirm’s largest partners, providing access to millions of shoppers and consistent transaction volume.
Is Affirm profitable today?
Yes. Affirm recently reported a positive GAAP operating margin of 7%, showing improving profitability alongside growth.
What are the main risks for Affirm investors?
Key risks include rising credit losses in a weaker economy, intense BNPL competition, and a high valuation multiple.
Is Affirm considered a long-term investment?
Many investors view Affirm as a long-term growth play due to its scale, partnerships, and expanding product ecosystem, but it carries higher risk than traditional financial stocks.Considering a $1,000 Investment in These Companies?
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