Investing in fintech stocks lately feels a bit like bringing a snorkel to a desert-perfectly reasonable in theory, but the environment leaves something to be desired. Block and PayPal, two of the industry’s most recognizable names, have spent 2025 doing their best impressions of sand dunes: steadily shifting, occasionally dramatic, but rarely upward. As of mid-August, Block’s shares had slumped 13% this year, while PayPal’s 21% drop made it look like they’d been caught in a monsoon. Both trade more than 70% below their peak values, a fact that would make even the most stoic investor reach for the antacids.
Yet here’s the twist: beneath these parched valuations lie ecosystems teeming with activity. Which one deserves a place in your portfolio? Let’s unpack this like a suitcase at a layby, shall we?
Block’s dual worlds: Where merchants and mortals coexist
Block operates two parallel universes. In one corner, Square serves merchants like a digital Swiss Army knife-payment terminals, inventory tools, and AI-driven analytics that whisper sweet nothings about customer behavior. Last quarter, this segment’s gross profit grew 11%, which isn’t exactly setting the world on fire, but it’s a steady simmer. In the other corner, Cash App entertains 57 million monthly users, many of whom treat it like a financial Swiss Army knife of their own. Borrow, its short-term lending feature, saw originations surge 95% year-over-year-a number so juicy it practically winks at risk-averse investors.
Block’s strategy? Sprinkle new products like confetti at a parade. Square AI helps businesses decode customer habits; Cash App’s Bitcoin features cater to both day traders and hodlers. Speaking of which: Jack Dorsey, Block’s co-founder and crypto enthusiast-in-chief, has been busily building hardware wallets and mining rigs, as if preparing for a future where Bitcoin isn’t just a speculative asset but a cornerstone of commerce. Whether this becomes a goldmine or a footnote in fintech history depends largely on how the crypto winds blow.
PayPal: The seasoned traveler in a crowded airport
PayPal, by contrast, is the veteran traveler who’s mastered the art of navigating crowded airports. With a presence in 200+ countries and $443 billion in quarterly payment volume, it’s the financial equivalent of a global airline alliance. Its 438 million users don’t just send money-they buy goods, pay bills, and (increasingly) use PYUSD, PayPal’s stablecoin, to zip transactions across the digital tarmac at breakneck speed.
New CEO Alex Chriss has spent the past year tinkering under the hood. Venmo, once a peer-to-peer payment app with delusions of grandeur, now boasts a debit card so popular it’s practically a fashion accessory. Revenue growth there outpaced the company’s overall performance, which is like finding a $20 bill in an old jacket pocket. Meanwhile, “PayPal World”-a forthcoming platform designed to connect disparate digital wallets-aims to be the Esperanto of payments, smoothing over the world’s financial language barriers.
And then there’s the balance sheet, which looks healthier than a yoga instructor on a kale cleanse. GAAP earnings per share jumped 20% last quarter, and free cash flow projections for the year ($6-7 billion) suggest PayPal isn’t just surviving; it’s stockpiling snacks for the next leg of the journey.
The final verdict: Pick your adventure
Both companies are, undeniably, masters of their domains. Block thrives where commerce gets physical-think coffee shops and boutiques-while PayPal reigns in the borderless realm of online transactions. But the choice ultimately hinges on your appetite for risk and vision of the future.
Block feels like hitchhiking with a crypto enthusiast: thrilling, unpredictable, and potentially rewarding if Bitcoin becomes the next Silk Road. PayPal, meanwhile, is the rental car with GPS and roadside assistance-less flashy, but you’ll almost certainly get where you’re going. At a forward P/E of 12.9, PayPal trades like a discount bin treasure, whereas Block’s valuation whispers, “Hold my beer and watch this.”
Of course, you could always buy both and call it a fintech index fund in miniature. After all, as any seasoned traveler knows, the best journeys often involve detours. 🚀
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2025-08-25 15:03