20 Fintech Stocks Riding the AI Wave Higher

09. Ally Financial Inc. (NYSE:ALLY)

Number of Hedge Fund Holders: 45

Ally Financial Inc. (NYSE:ALLY), founded in 1919 and headquartered in Detroit, Michigan, operates as a digital financial services company that provides a wide range of products and services to consumers, commercial clients, and corporate customers, primarily in the United States and Canada. As a prominent player in the fintech sector, Ally Financial Inc. (NYSE:ALLY) leverages technology to streamline automotive finance, mortgage finance, insurance, and corporate finance operations. The company’s involvement with AI is particularly noteworthy, as it utilizes advanced analytics and data-driven insights to enhance customer experience and operational efficiency across its diverse service offerings.

Recent analyst ratings underscore Ally Financial Inc. (NYSE:ALLY) potential. On October 7, JPMorgan upgraded the stock from Neutral to Overweight, citing a favorable risk/reward profile despite a reduced price target of $40.00, down from $46.00. This upgrade reflects a reassessment of Ally’s market position, indicating that most credit and earnings challenges have already been factored into the current stock price. The analyst emphasized that the valuation presents an attractive entry point for investors, suggesting that upside potential outweighs the risks at this juncture.

In its Q2 2024 earnings report, Ally Financial Inc. (NYSE:ALLY) demonstrated resilience, reporting a 15% revenue increase and an adjusted EPS of $0.97, exceeding expectations of $0.64. However, the company faced challenges within its automotive retail sector, leading to the divestiture of its lending business to Synchrony Financial for $2.2 billion in loan receivables. During the earnings call, CEO Michael Rhodes highlighted the importance of technological investments, emphasizing Ally’s commitment to modernizing its platforms and enhancing data analytics capabilities. He noted that these advancements are essential for maintaining competitive advantages in the evolving fintech landscape.

Overall, Ally Financial Inc. (NYSE:ALLY) is well-positioned to leverage its extensive dealer network and robust technology investments to navigate industry challenges and capitalize on growth opportunities. Analysts from Bank of America and Citi have maintained positive ratings, projecting substantial growth in tangible book value, while RBC Capital reinstated coverage with an Outperform rating, underscoring manageable credit challenges. As the fintech sector continues to embrace AI innovations, Ally Financial Inc. (NYSE:ALLY) strategic focus on technology and customer-centric solutions will likely drive long-term shareholder value.