"It's a head-to-head battle of fintech startups with popular personal finance apps. In one corner you've got the challenger, an up-and-coming banking disruptor named Dave Inc. ( NASDAQ:DAVE). In the other corner is the champion with a U.S. banking charter, SoFi Technologies ( NASDAQ:SOFI). SoFi Technologies is the better-known of these two companies, but don't assume SoFi is the winner. Dave Inc. may eventually pursue a banking charter, and both of these neo-banking firms are making financial strides this year."
"Fintech companies like Dave Inc. and SoFi Technologies are highly sensitive to developments impacting interest rates. This helps to explain why DAVE stock and SOFI stock tanked in March and April, when tariff concerns caused investors to worry about higher-for-longer interest rates. But then, starting in April, investors looked ahead and figured that the Federal Reserve would eventually pivot to interest-rate cuts. Consequently, DAVE stock and SOFI stock staged relief rallies over the past five to six months."
Dave Inc. and SoFi Technologies compete as fintech neo-banks, with SoFi holding a U.S. banking charter and wider name recognition while Dave may pursue a charter. Both firms' stock prices are highly sensitive to interest-rate expectations, which contributed to declines in March and April amid tariff-driven rate concerns. Beginning in April, anticipation of eventual Federal Reserve rate cuts triggered relief rallies for both DAVE and SOFI stocks. As of September 14, SoFi rose 72.4% year-to-date while Dave surged about 163.94% year-to-date. Some investors view Dave's gains as potentially overextended, and notable valuation differences exist.
Read at 24/7 Wall St.
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