💰🚀Financials: The Quiet Giants of the Next Supercycle
The Hidden Rotation in the Market
When markets get noisy, the temptation is to lean into what’s popular. Today, that’s artificial intelligence. Every headline, every earnings report, every investor pitch seems to orbit Nvidia or the latest AI software darling. But while the spotlight shines there, another sector is quietly laying the foundation for its own supercycle: financials.
Here’s what matters: AI isn’t just benefiting the obvious names. Financials are second-order beneficiaries—they’re embedding AI and blockchain into their businesses in ways that could make them more efficient, more profitable, and potentially more valuable in the years to come.
Think about it. When AI cuts down fraud detection times, enhances risk models, automates compliance, or when blockchain makes settlement near-instant—those aren’t headline-grabbing innovations, but they can transform profitability at scale. And unlike a startup burning cash to “disrupt,” banks already have customers, balance sheets, and cash flow.
Tom Lee has been pounding the table on this idea: financials are showing visible earnings growth, yet the market still values them like cyclical plays. That mispricing won’t last forever. When it corrects, it could be the beginning of a powerful rotation—away from overcrowded AI trades into financials that have AI upside without the stretched valuations.
That’s why, as an investor juggling time, responsibilities, and endless market chatter, this shift matters to you. It’s not about chasing what’s hot; it’s about positioning where profitability, growth, and valuation converge.
SoFi – The Fintech That Refused to Break
Let’s start with SoFi, because it’s the outlier in the space—the fintech story that refused to be crushed by the environment.
SoFi today is worth $30.5 billion, a staggering climb when you consider where it was just five years ago. In that period, the stock rose 145%. Narrow the lens: over three years, it’s up 325%. Over just the last 12 months? 217%. This is not luck—it’s persistence, execution, and resilience.
The remarkable thing about SoFi is how it has performed across environments. Rates rising? It grew. Rates falling? It grew. Student loan repayments frozen, cutting off a major business line? It grew anyway. Very few companies can claim that kind of adaptability.
Back in 2018, SoFi had 652,000 members and about $250 million in revenue. Fast-forward to today: 12 million members and over $3 billion in trailing twelve-month revenue. That’s not a broken company with a “lucky” stock price; that’s a compounder in action.
And yet, with this success comes noise. Analysts and internet pundits toss around wild targets—$45, $75, $100 per share, S&P 500 inclusion “before Robinhood.” Short squeeze chatter every week. All nonsense. The stock doesn’t need hype. It doesn’t need forced comparisons to Robinhood’s 20x sales multiple either. SoFi trades at about 10x sales because it deserves a growth premium—but 15x or 20x is not the norm. That’s Nvidia’s world, not SoFi’s.
The reality? SoFi’s strength isn’t in hype. It’s in the fact that whether in bull or bear conditions, it has performed and grown. That’s the kind of company that makes you sleep better at night.
The Giants – JPMorgan and Goldman Sachs
Now, let’s pivot to the heavyweights. If SoFi is the disruptor, JPMorgan and Goldman Sachs are the anchors.
- JPMorgan: Market cap $828 billion. Annual revenue $163.7 billion. One of the most profitable institutions on earth. Growth slower than SoFi, yes—but consistent, compounding, and enormous in scale.
- Goldman Sachs: Market cap $235.8 billion. Annual revenue $54.7 billion. Expected EPS growth at 13.1% over the next two years, actually outpacing JPMorgan.
Over the last decade, Goldman’s earnings grew at a 14.8% compound annual growth rate. JPMorgan’s at 13.1% CAGR. These numbers don’t scream “hyper-growth,” but they scream “durability.”
Now, here’s where it gets interesting: valuations. JPMorgan and Goldman both trade at 15–16x earnings, not far above their 10-year averages. Compare that to Costco trading at ~50x, or Coca-Cola and Pepsi at mid-20s multiples with far slower growth. Or Nvidia at 20x sales. The market is willing to overpay for predictability and cash flow. Financials, for now, aren’t given that credit.
But with AI and blockchain poised to enhance their profitability, there’s a clear path for multiple expansion. If JPMorgan or Goldman were re-rated from 15x to 20x earnings because of newfound growth visibility, stock prices could move significantly higher without any bubble behavior.
And remember, as rates eventually ease and IPO pipelines reopen, banks like these don’t just benefit—they thrive.
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SoFi’s Road Ahead – Misunderstood, Underestimated
Back to SoFi. Here’s where the disconnect lies: analysts don’t believe.
For fiscal 2026, analysts project $0.55 EPS. SoFi itself projects $0.67 at the midpoint. Historically, SoFi has beaten expectations—yet Wall Street still discounts its future. Revenue forecasts are similarly conservative: 22.4% growth in 2025, falling to just 15% in 2027. Anyone who has followed SoFi’s track record knows these numbers are likely too low.
SoFi has repeatedly grown faster, become profitable faster, and scaled beyond what the market expected. Even the macro environment, which by all logic should have crippled it (rate hikes, student loan freezes), only made it stronger. Today, it’s not just a lender. It’s building out high-margin, fee-based revenue businesses, which means less risk and higher profits.
CEO Anthony Noto isn’t thinking in quarters. He’s thinking in decades. In his words, SoFi is at the beginning of two technological supercycles—AI and blockchain—that will reshape financial services. This isn’t a man cashing out after a stock rally. He recently took out a loan on shares he can’t even sell until 2028. That’s conviction.
SoFi is already hiring aggressively in AI, blockchain, and payments. It’s building for “durable compounded decades of growth.” That’s what separates it from a momentum stock.
But let’s be clear: should SoFi be worth $100 today? Absolutely not. That would put the company at a $120 billion market cap while still generating under $4 billion in revenue. Unrealistic. Long term? A hundred-billion-dollar SoFi is inevitable. But not today, not tomorrow. This is a long game.
Your Edge in the Years Ahead
So where does this leave you?
Financials are no longer the “boring” corner of the market. They’re entering a transformation cycle powered by AI and blockchain that could reshape not only how they operate but also how they’re valued.
- SoFi is the high-growth disruptor, scaling fast, executing through adversity, and led by a CEO with a decades-long vision.
- JPMorgan is the fortress—gigantic, steady, and positioned to gain from rate cuts and an eventual return of corporate activity.
- Goldman Sachs is the agile heavyweight, with faster earnings growth than JPMorgan and a business model that thrives when markets open up.
The mispricing is real. Financials are growing, yet still valued conservatively. As investors rotate away from crowded trades and start looking for AI exposure outside the obvious names, financials could see multiple expansion that drives serious upside.
The message is simple: block out the hype. Ignore the $75 short-squeeze talk. Focus instead on the fundamentals. Financials are one of the few sectors that can grow in almost any macro condition, and they’re now layering on technologies that could multiply that growth.
This isn’t about chasing the next big thing. It’s about quietly positioning for what could be the most durable growth story of the next decade.
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