Summary:
The Federal Reserve is set to hold its final FOMC meeting of 2025 in late December, with market participants optimistic about a potential quarter-point rate cut. This would mark the third such reduction this year, bringing the benchmark lending rate down to around 3.75-4%. The current probability of a rate cut stands at 84.7%, according to the CME FedWatch tool.
Market Participants Expect Fed Rate Cut
The Federal Reserve will host its last FOMC (Federal Open Market Committee) meeting of 2025 on December 9-10. Market participants are hopeful for a 25 basis-point cut in the benchmark lending rate next month, which would be the third rate cut of 0.25% this year. The existing Fed fund rate is currently within the range of 3.75-4%. On September 17, the Fed decided on a much-hyped 25-basis-point cut in the benchmark lending rate to bring it to the range of 4-4.25%.
The performance of the financial technology (fintech) space is inversely related to the movement of interest rates. A low-interest-rate regime will be beneficial for this space as a higher interest rate significantly affects technological improvement and product innovation of fintech companies. Fintech’s innovative nature positions it as a fascinating choice in the evolving financial landscape. With the expansion of mobile and broadband networks, fintech is poised for significant growth.
The rise of artificial intelligence (AI) technologies and machine learning further revolutionizes banking, payments, and investments, offering efficient and secure financial solutions. At this stage, we recommend investing in five financial technology bigwigs with a favorable Zacks Rank. These are: Robinhood Markets Inc., Interactive Brokers Group Inc., Fair Isaac Corp., SoFi Technologies Inc., and Moody’s Corp.
Investing in Fintech Giants
The chart below shows the price performance of our recommended picks in the past month.
Zacks Investment ResearchImage Source: Zacks Investment ResearchRobinhood Markets Inc.
Robinhood Markets operates a financial services platform in the United States that allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies using its Robinhood Crypto platform.
Given the higher retail participation in markets, HOOD’s trading revenues are expected to improve in the near future. Buyouts and product diversification efforts to become a leader in the active trader market will likely bolster its financials. HOOD’s third-quarter 2025 results were aided by solid trading activity and growth in net interest revenues.
HOOD’s vertical integration will likely enhance its product velocity. Further, a robust liquidity position will help HOOD sustain share repurchases. Robinhood Markets has an expected revenue and earnings growth rate of 21% and 16.2%, respectively, for next year. The Zacks Consensus Estimate for next year’s earnings has improved 8.6% over the last 30 days.
Interactive Brokers Group Inc.
Interactive Brokers Group’s efforts to develop proprietary software, lower compensation expenses relative to net revenues, enhance its emerging market customers and global footprint, along with relatively high rates are expected to continue aiding revenues. IBKR’s third-quarter 2025 results reflected solid revenue growth and lower expenses.
IBKR’s initiatives to expand its product suite and the reach of its services will bolster its market share. Interactive Brokers Group has an expected revenue and earnings growth rate of 5.5% and 8.1%, respectively, for next year. The Zacks Consensus Estimate for next year’s earnings has improved 1.8% in the last 30 days.
Fair Isaac Corp.
Fair Isaac is benefiting from strong financial performance driven by robust growth in its Scores and Software segments. FICO has expanded its scoring models to incorporate ‘Buy Now, Pay Later’ loan data, enhancing the predictive accuracy of FICO scores.
Advancements in credit modeling, including the development of FICO Score 10T for non-GSE mortgages, present significant growth opportunities. The Software segment has demonstrated strength, with increased adoption of SaaS and license revenues indicating strong platform engagement.
FICO’s Lenders Leading Inclusion Program supports lenders in making better decisions. Fair Isaac has an expected revenue and earnings growth rate of 19.7% and 31.3%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for current-year earnings has improved 10% in the last 60 days.
SoFi Technologies Inc.
SoFi Technologies positions itself as a leader, leveraging its online banking services and the Galileo platform to expand its market presence. Lower interest rates provide a favorable environment for SOFI’s lending business, encouraging customer growth through competitive loan and refinancing options.
SOFI’s focus on innovation, including new product launches and strategic partnerships, bolsters its reputation as a forward-thinking competitor to traditional banks. SOFI provides various financial services in the United States, Latin America, and Canada. SOFI operates through three segments: Lending, Technology Platform, and Financial Services.
SoFi Technologies has an expected revenue and earnings growth rate of 25.5% and 65.1%, respectively, for next year. The Zacks Consensus Estimate for next year’s earnings has improved 5.3% in the last 30 days.
Moody’s Corp.
Moody’s dominant position in the credit rating industry, along with opportunistic acquisitions and restructuring efforts to diversify revenues and footprint, will support top-line expansion. MCO has been meaningfully growing through strategic acquisitions, increasing scale and cross-selling opportunities across products and vertical markets.
In August 2025, it announced plans to secure a majority equity ownership in Middle East Rating & Investors Service. In June 2025, MCO fully acquired ICR Chile, solidifying its presence in Latin America’s domestic credit markets. A solid rebound in bond issuance volume is expected to drive MCO’s growth.
A strong balance sheet position and earnings strength are likely to keep MCO’s capital distributions sustainable. Moody’s has an expected revenue and earnings growth rate of 6.8% and 11.3%, respectively, for next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.2% in the last 30 days.
Conclusion:
The Federal Reserve is on track to hold its final FOMC meeting of 2025 in late December, with market participants anticipating a potential quarter-point rate cut. This would be the third such reduction this year, bringing the benchmark lending rate down to around 3.75-4%. The current probability of a rate cut stands at 84.7%, according to the CME FedWatch tool.
As interest rates continue to affect technological improvement and product innovation in fintech companies, it is essential to invest in forward-thinking firms that incorporate cutting-edge AI technologies and machine learning. Our top picks for fintech investment are Robinhood Markets Inc., Interactive Brokers Group Inc., Fair Isaac Corp., SoFi Technologies Inc., and Moody’s Corp.
Each of these companies carries a Zacks Rank of either #1 (Strong Buy) or 2 (Buy), with impressive expected revenue and earnings growth rates. With a robust liquidity position, solid trading activity, and increased adoption of SaaS and license revenues, our recommended fintech giants are poised for significant growth.