PayPal vs. Upstart: Which Fintech Stock Should You Buy Today?

The fintech landscape in 2025 has never been more dynamic, with companies like PayPal PYPL and Upstart Holdings UPST leading innovation in digital payments and AI-driven lending. For investors seeking exposure to top fintech stocks in 2025, both names offer compelling stories, but they operate in very different arenas. 

PayPal, a veteran in online payments, continues to expand its ecosystem through strategic partnerships, new payment features, and growing adoption of Venmo and branded checkout solutions. Meanwhile, Upstart has captured attention with its AI-powered lending platform, showing strong revenue growth and expanding beyond personal loans into auto and home financing. Yet, each stock carries its set of risks, macro uncertainties and competition for PayPal, and credit sensitivity and volatility for Upstart. 

Let’s examine PayPal’s growth, Upstart’s AI lending innovations and other factors to find out which fintech stock deserves a spot in your portfolio.

PayPal: A Proven Leader in Digital Payments

PayPal remains one of the most established fintech stocks in 2025, and its recent moves show a company actively evolving to stay relevant. Venmo, a key growth engine, saw revenues rise more than 20%, while total payment volumes grew 12%, its strongest growth rate in three years. Venmo debit card usage is accelerating, with monthly active accounts up 40%, while “Pay with Venmo” total payment volume surged more than 45%, reflecting strong consumer adoption. Branded checkout continues to expand. More than 60% of U.S. branded volume is now transacted through PayPal’s upgraded experience, and international rollouts in Germany and the U.K. are underway.

PayPal is also pushing into AI and partnerships that broaden its reach. Collaborations with Google, Salesforce, and Anthropic aim to integrate AI-driven commerce tools and seamless payment experiences, while the PYUSD stablecoin and crypto payment options position PayPal for emerging digital commerce trends. 

Additionally, its multi-year BNPL (Buy Now, Pay Later) partnership with Blue Owl Capital and holiday promotions offering 5% cashback illustrate the company’s innovative approach to boosting transaction volume.

Despite intense competition from other fintechs and traditional banks, PayPal’s scale, diversified products and strategic partnerships make it a reliable choice for investors seeking fintech stocks with strong growth prospects.

Upstart: AI Lending Growth With Volatility

Upstart has emerged as a high-growth fintech stock, thanks to its AI-powered lending platform, which has transformed traditional credit underwriting. In the second quarter of 2025, Upstart posted revenues of $257 million, more than double year over year, while loan originations surged to $2.8 billion, the highest volume in three years. 

Impressively, the company returned to GAAP profitability with $5.6 million in net income compared to a $54.5 million loss in the prior-year period, and contribution profit rose 85% to $141 million, maintaining a 58% margin. Conversion rates improved to nearly 24%, demonstrating strong operational efficiency and borrower demand.

Upstart is also diversifying beyond personal loans. Auto originations grew sixfold and its Home segment nearly ninefold over the past year, together representing more than 10% of total loan volume. Partnerships with credit unions such as Cornerstone Community Financial and ABNB Federal Credit Union expand Upstart’s reach and provide stable funding channels. Its AI model, Model 22, resulted in a 17 percentage-point boost in separation accuracy compared to the benchmark textbook credit model, reducing costs and improving approval speed, while 92% of loans are fully automated.

However, Upstart AI lending carries risk. Its exposure to credit-sensitive borrowers makes it vulnerable to economic downturns. Its share price in recent times was affected by softer credit conditions and fallout from distress in the used car lending market. Although not directly related to the company, the bankruptcy of Tricolor Holdings, which catered to borrowers with limited credit history, amplified worries about credit quality.

How Do Zacks Estimates Compare for PYPL & UPST?

The Zacks Consensus Estimate for PayPal’s 2025 sales and EPS implies a year-over-year increase of 3.92% and 12.47%, respectively. EPS estimates for 2025 have been trending northward over the past two months. 

For PYPL:

Meanwhile, the consensus estimate for Upstart’s 2025 sales implies a year-over-year rise of 51.36%. While the full-year 2025 and 2026 Zacks Consensus Estimates for EPS have been revised downward over the past two months, the figures suggest significant increases year over year.

For UPST:

Valuation: PYPL vs. UPST

From a valuation perspective, we note that PayPal shares are trading cheap, as suggested by the Value Score of A. However, Upstart shares are currently overvalued, as implied by the Value Score of F. 

In terms of forward 12-month Price/Sales (P/S), PYPL stock is trading at 1.91X, below its three-year median of 2.16X, while Upstart is currently trading at 3.98X, which is also below its three-year median of 4.08X. 

Price Performance: PYPL vs. UPST

Over the past six months, shares of UPST have outperformed PayPal. PYPL shares have also underperformed the S&P 500 composite.

Conclusion: Why PayPal Stands Out

Both PayPal and Upstart offer compelling cases in the fintech sector, but the contrast is clear. Upstart’s AI-driven lending platform is innovative and growing rapidly, yet its heavy exposure to credit-sensitive borrowers makes it volatile. 

PayPal, by comparison, combines scale, diversified products and strong user engagement through Venmo, branded checkout and strategic AI partnerships. Its steady revenue growth, expanding global reach, and innovative initiatives across payments and commerce provide a more reliable foundation. 

For investors seeking fintech stocks with lower volatility and a proven track record, PayPal stands out as the stronger choice for a portfolio. Even though both companies currently carry a Zacks Rank #3 (Hold) each, PYPL has a VGM Score of B, while UPST has a score of F, implying that PayPal is having a better hand at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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