Better Fintech Stock: SoFi Technologies vs. Upstart

SoFi Technologies (NASDAQ: SOFI) is a digital banking leader that's quickly growing in the financial services industry. And investors are taking notice. The share price has soared 416% in the past three years (as of Jan. 12).

Upstart (NASDAQ: UPST) is another innovative enterprise, leveraging its expertise in artificial intelligence (AI) to disrupt the way that borrowers access credit. Its shares have been extremely volatile. And today they trade 88% below their peak.

Between these two businesses, which one is the better fintech stock to buy now?

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SoFi has evolved into a very profitable banking player

Growth has never been an issue for SoFi. Its adjusted net revenue between Q3 2022 and Q3 2025 (ended Sept. 30) was up a remarkable 126%. Customer additions have been through the roof as well. This is a clear indication of SoFi's success in the competitive banking industry. While financial services products are typically commoditized offerings, SoFi is winning thanks to its exceptional user experience.

Top-line gains have translated to profit growth. After reporting adjusted net income of $227 million in 2024, the leadership team expects that figure to total $455 million in 2025. This is a massive improvement from the money-losing days; SoFi posted an adjusted net loss of $54 million in 2023. Operating a digital-only business model lends itself to scalability, which is what SoFi is showing right before our eyes.

The innovation pipeline also remains robust, positioning this company as a forward-thinking enterprise that is always figuring out new ways to serve its customers. SoFi recently partnered with Lightspark to enable cheap and fast cross-border transfers that leverage the Bitcoin Lightning network. And it introduced cryptocurrency trading on its platform as well. These could prove to be winning product launches for SoFi's affluent and younger target audience.

Upstart was ahead of the curve with its AI lending model

Upstart was working on machine learning and AI capabilities before they were cool buzzwords in the corporate world. For over a decade, the business has developed its in-house AI lending model, which looks at thousands of unique variables about borrowers to better gauge their ability to repay a loan. This is a more thorough system than the traditional FICO Score that only considers five factors. Upstart shows that its model can approve more borrowers and keep default rates in check, which is a winning combination for its more than 100 lending partners.

The company has returned to growth, with transaction volume and revenue rising 128% and 71%, respectively, in Q3 2025. Personal loans have long been the key product for Upstart. However, auto loan originations and home equity lines of credit (HELOCs) surged 357% and 324%, respectively, year over year in the third quarter. The theoretical addressable market opportunity is sizable, given how much lending activity occurs in the U.S. each year.

Upstart is still in the early innings of its lifecycle, so profitability hasn't been a priority. But it's making progress here. Executives expect GAAP net income of $50 million for the full year of 2025. This would be a marked improvement from the $129 million net loss in 2024.

Risk tolerance will determine the ultimate decision

The sell-side analyst community believes that Upstart is a more promising stock pick. The consensus one-year price target implies 24% upside. That's much higher than the 2% upside implied from SoFi's price target. Investors can take these with a grain of salt or view them as a key decision-making factor.

Upstart is surprisingly cheaper at a forward price-to-earnings (P/E) multiple of 20.5. But I believe it presents a riskier opportunity. The company hasn't proven that it can register consistent revenue and profit growth over an entire economic cycle. There is heightened uncertainty.

In my view, SoFi is the best investment opportunity, despite what analyst price targets reveal. Its valuation is more expensive, with the stock trading at a forward (P/E) ratio of 46.1. But its profits are soaring. And there's a much clearer path to ongoing success.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Upstart. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.