Why Are Affirm (AFRM) Shares Soaring Today

What Happened?

Shares of buy now, pay later company Affirm (NASDAQ:AFRM) jumped 5.1% in the afternoon session after reports highlighted a significant boom in 'buy now, pay later' (BNPL) spending during the holiday season, signaling strong consumer adoption. 

Data showed that BNPL services drove $10.1 billion in spending starting in November, a 9 percent increase from the previous year. Cyber Monday set a record for BNPL usage, accounting for $1.03 billion in sales. This trend supported Affirm's own performance, as the company had reported a 52% year-over-year growth in total transactions for its recent fiscal first quarter. Furthermore, the company noted that 96% of its sales came from repeat customers, indicating a loyal user base. The positive industry data, coupled with Affirm's strong transaction growth, appeared to boost investor confidence in the company's outlook.

After the initial pop the shares cooled down to $69.90, up 4.3% from previous close.

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What Is The Market Telling Us

Affirm’s shares are extremely volatile and have had 56 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 12 days ago when the stock gained 3.7% on the news that investors grew more optimistic about a potential Federal Reserve interest rate cut in December. The positive sentiment was fueled by comments from New York Fed President John Williams, a voting member of the rate-setting Federal Open Market Committee, who stated the central bank could cut rates "in the near term" without jeopardizing its inflation targets. Following his remarks, market expectations for a rate cut in December shifted significantly. According to the CME FedWatch Tool, the probability of a December rate reduction surged from a 37% chance earlier in the day to 70%. While lower rates can compress bank profit margins, investors often view them as a catalyst for broader economic activity, potentially boosting loan demand and reducing the risk of defaults.

Affirm is up 11.8% since the beginning of the year, but at $69.90 per share, it is still trading 24.2% below its 52-week high of $92.18 from September 2025. Investors who bought $1,000 worth of Affirm’s shares at the IPO in January 2021 would now be looking at an investment worth $718.78.

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