We recently compiled a list of the 15 Software Infrastructure Stocks Outperforming In 2025. In this article, we are going to take a look at where PagSeguro Digital Ltd (NYSE:PAGS) stands against the other software infrastructure stocks.
Software stocks had a troubling end to the last year and some even continued to fall during January. After a solid year, profit-taking would have been acceptable. However, the continuous decline in January had investors worried, with some media personalities calling it the end of software stocks.
It didn’t take the market long to change its views though. In general, software stocks are not as negatively impacted by tariffs as hardware stocks. Since Trump took over, people have been evaluating their options and with tariffs on the horizon, found software to be a relatively safe sector.
There were some concerns on the AI front as well. The emergence of DeepSeek AI has meant that companies in the US may not be willing to spend more on their AI ventures. Similarly, businesses could simply use DeepSeek’s much cheaper technology, causing downward pressure on subscription prices for instance. So far, none of this looks like becoming a reality, so on the back of solid earnings, most software stocks have comfortably outperformed the market.
We decided to take a look at the top 15 stocks that are outperforming the market so far this year. To come up with our list of 15 software infrastructure stocks outperforming in 2025, we only considered stocks with a market cap of at least 2 billion that were outpacing the broader market till the end of last week.
A businessperson standing in front of a brick-and-mortar establishment using a tablet to process an in-person payment.
PagSeguro Digital Ltd (NYSE:PAGS)
PagSeguro Digital Ltd is a payment and financial solutions provider to micro-merchants, consumers, small and medium-sized companies, and individual entrepreneurs. The company offers cards, credit products, and digital banking solutions. It also provides investment services, research services, and insurance services.
The company’s stock is down 42% in a year. But there is reason to believe it bottomed out late last year and is well on its way to recovery, as shown by a 16% YTD performance. It increased its total payment volumes by 37% resulting in a bottomline improvement of 30%. This is a considerable improvement considering transaction volumes drive 55% of their total revenue.
After completing a $250 million buyback in 2024, the company continued with its shareholder-friendly approach announcing another $200 million worth of buybacks. This may be beneficial for shareholders but analysts are warning about other headwinds. Citi Research for instance downgraded the stock from Buy to Neutral last month. Citi analysts believe the rising interest rates in the country are going to cause significant headwinds for fintech companies. BofA analysts had a similar view in December, citing slower GDP in addition to the rising interest rates, which the bank sees staying at elevated levels for longer than anticipated.
Overall PAGS ranks 11th on our list of the software infrastructure stocks outperforming in 2025. While we acknowledge the potential of PAGS 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 timeframe. If you are looking for an AI stock that is as promising as PAGS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.