- The Investor Lookout
- Posts
- 📈 Affirm's Profit Party
📈 Affirm's Profit Party
This isn't just another earnings beat; it's a masterclass in corporate execution that suggests the fintech winter may finally be thawing for companies that actually know how to count their pennies.
Evelio Silvera
August 29, 2025
Good Morning…
While Wall Street was busy writing obituaries for the buy-now-pay-later sector, Affirm quietly delivered something rarer than a profitable quarter—a profitable quarter exactly when management promised it would happen.
🔎 Market Trends → S&P, Dow score record high closes as Nvidia results buttress AI rally
🖥️ Market Movers from Fintech.tv → [WATCH] From Whales to DATS: The Shift in Bitcoin Ownership and Yield Generation
🚨 Enjoy the Labor Day weekend, the markets are closed Monday, so Bull Street will be back on Tuesday.
And now…
⏱️ Your 5-minute briefing for Friday, August 29, 2025:
MARKET BRIEF
Before the Open
As of market close 08/28/2025.
Pre-Market
| 
|
Fear & Greed
Markets in Review
S&P Breaks 6,500 as Nvidia Confirms AI Is No Fad
The S&P 500 closed above 6,500 (6,501.86, +0.32%) for the first time. The Nasdaq rose 0.53% to 21,705.16. The Dow added 72 points (+0.16%) to 45,636.90, also a record.
The Big Picture:
Wall Street got what it wanted: Nvidia’s (NVDA) blowout earnings validated the AI trade, even if the stock slipped on guidance. Revenue surged 56% YoY, with $54B projected next quarter. The catch: no China sales baked in — meaning upside remains if U.S.–China negotiations thaw.
Other semis rallied hard. Broadcom (AVGO) +2.8%. Micron (MU) +3.6%. The AI tide is lifting more than one boat.
Beyond chips, the macro backdrop is strengthening. GDP grew 3.3%, topping forecasts. Oil stayed above $75 a barrel, while gold ticked higher on Fed uncertainty. Investors shrugged off Washington drama around Fed independence. The rally is broadening, not narrowing.
Market Movers:
Nvidia (NVDA): Beat expectations, guided conservatively. Wall Street firms — JPMorgan, Citi, Bernstein — raised price targets, underscoring longer-term confidence.
Snowflake (SNOW): Exploded +20% on strong results tied to AI demand, proving the ecosystem effect.
Hormel (HRL): Sank 13% on profit warnings from higher commodity costs — a reminder tariffs bite consumer staples harder than tech.
What They’re Saying:
“The core growth outside of China was really good. There should be more great growth in the fourth quarter — all systems go,” said Ben Reitzes, head of tech research at Melius.
WHAT WE’RE WATCHING
Events
Today: Bureau of Economic Analysis - Core Personal Consumption Expenditures (PCE) Price Index m/m - 8:30am
Why You Should Care: It's the Federal Reserve's primary inflation measure. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate;
Earnings Reports
Today: Alibaba
Monday: Market Closed. There are no noteworthy companies for today.
MARKET INSIGHTS
Leading News
Affirm's Profit Party: Buy-Now-Pay-Later Finally Pays Off
Photo Credit: Jonas Leupe
Why it matters:
After years of burning cash while disrupting traditional credit, Affirm (AFRM) just delivered its first profitable quarter right on schedule—a rare feat in today's execution-challenged market.
Zoom Out:
The buy-now-pay-later sector has been Wall Street's favorite whipping post since interest rates started climbing. Yet Affirm just posted 20 cents per share versus the 11 cents analysts expected, nearly doubling estimates while revenue jumped 33% to $876 million.
This isn't just a numbers beat—it's validation of a business model that skeptics dismissed as pandemic-era froth. Gross merchandise volume surged 43% to $10.4 billion, suggesting consumers aren't abandoning installment payments despite tighter credit conditions.
The timing couldn't be better. With traditional credit card rates hovering near 22%, Affirm's transparent fee structure looks increasingly attractive to cost-conscious millennials and Gen Z shoppers.
Key Insights:
Partnership Power: While competitor Klarna lost Walmart (WMT), Affirm locked in Amazon (AMZN), Shopify (SHOP), and Apple (AAPL)—a trifecta that reaches nearly every digital commerce touchpoint
Margin Magic: The shift to profitability isn't just revenue growth—it's disciplined underwriting finally paying dividends as the company matures beyond its cash-burning adolescence
Forward Guidance: Q1 revenue forecast of $855-885 million suggests management's newfound conservatism is built on sustainable momentum, not one-time tailwinds
Market Pulse:
"This consistent execution led Affirm to achieve operating income profitability in FQ4'25 – right on the schedule we committed to a year ago." —Affirm shareholder letter
Bull’s Take:
Affirm just proved that fintech disruptors can graduate to profitability without sacrificing growth—a 15% after-hours pop that could signal the sector's maturation phase is finally here.
Market Stories of Note
Ulta Beauty Proves the 'Lipstick Effect' Still Has Legs:
Ulta Beauty (ULTA) just raised its full-year forecast after delivering 6.7% comparable sales growth—more than double expectations—proving that even budget-conscious consumers refuse to compromise on their mascara. The beauty retailer's ability to grow transactions 3.7% while increasing average ticket 2.9% demonstrates that premium beauty spending remains surprisingly recession-resistant, even as shoppers pinch pennies elsewhere. Smart investors should note this isn't just about vanity—it's about a company that's mastered the art of making discretionary spending feel essential, with international expansion and a third-party marketplace launching this quarter to boot.
Pure Storage Strikes Gold in the AI Storage Wars:
Pure Storage (PSTG) just proved that sometimes the best AI play isn't the obvious one—delivering a 32% single-day surge after landing Meta as its "key storage provider" in a market where hyperscale giants are desperate to squeeze more computing power from every kilowatt. The company's 13% revenue growth to $861 million and raised guidance to $3.6-3.63 billion reveals the hidden infrastructure winners emerging from AI's voracious appetite for data storage, with Pure deploying up to 2 exabytes (that's 2 billion gigabytes) for Meta alone. Smart money recognizes that while everyone chases the flashy AI chip makers, the unglamorous plumbing companies solving power and cooling efficiency—like Pure's space-saving storage arrays—often deliver the most sustainable returns when technological revolutions mature.
CRYPTO
Fear & Greed
Headlines
All content provided by Investor Lookout and Bull Street is for informational and educational purposes only and should not be taken as trading or investment recommendations.
Reply