We recently compiled a list of the 20 Best Fintech Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Clearwater Analytics Holdings, Inc. (NYSE:CWAN) stands against the other fintech stocks.
Tech stocks have faced challenges lately, and fintech companies have been hit particularly hard. On March 10, CNBC reported that the Nasdaq experienced its biggest drop since 2022 with financial technology companies being some of the biggest losers. These companies included stock trading apps and cryptocurrency exchanges, which suffered due to a drop in Bitcoin prices. Bitcoin declined by nearly 5%, continuing a downward trend. The leading cryptocurrency has fallen 19% over the past month.
READ ALSO: 10 Cheap Technology Stocks to Buy According to Hedge Funds and 10 Worst Performing Crypto Stocks to Buy Now.
Beyond crypto, other fintech sectors like online lenders and payments companies also suffered. These companies also declined more than the broader market.
Fintech analysts point to declining consumer confidence as a potential challenge, especially for companies that rely on consumer spending. In February, the Conference Board’s consumer confidence index fell to 98.3, falling by nearly 7%. This decline marked the largest monthly drop since August 2021. According to CNBC, analysts noted that while fintech companies had performed relatively well since the election, sentiment has recently turned sour due to declining consumer confidence and signs of slowing discretionary spending.
The current fintech sell-off came after a strong rally in the fourth quarter of 2024, which was driven by expectations of Fed rate cuts and hopes for a more favorable regulatory environment under the Trump administration.
Despite a challenging time, fintech companies continue to invest in new technologies. This is leading to significant innovation and disruption in financial services. Additionally, recent declines could present a buying opportunity as certain fintech companies are setting themselves to perform well in the future.
Methodology
To compile our list of the 20 best fintech stocks to buy according to billionaires, we looked for the biggest fintech companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best fintech stocks. Next, we focused on the top 20 fintech stocks most favored by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s Q4 2024 database. Finally, the 20 best fintech stocks to buy were ranked in ascending order based on the number of billionaires holding stakes in them as of Q4 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A wide shot of a large financial data center.
Clearwater Analytics Holdings, Inc. (NYSE:CWAN)
Number of Billionaire Investors: 10
Number of Hedge Fund Holders: 48
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a financial technology company that provides investment accounting software for reporting and reconciliation services for institutional investors. The company offers a variety of services including investment portfolio planning, performance reporting, data aggregation, reconciliation, accounting, compliance, risk, and order management. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) ranks among the best fintech stocks to buy according to billionaires.
On January 13, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) announced its agreement to acquire Enfusion, a leading provider of software solutions for the investment management and hedge fund industry. This acquisition, for a purchase price of $1.5 billion, will enhance Clearwater Analytics Holdings, Inc.’s (NYSE:CWAN) platform by adding front-to-back capabilities. This strategic move aligns with the company’s goal of creating a cloud-native platform for the investment management industry. Additionally, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is investing in research and development, particularly in Generative AI, to innovate and stay ahead of the competition.
Overall, CWAN ranks 19th on our list of the best fintech stocks to buy according to billionaires. While we acknowledge the potential of CWAN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CWAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
