Some of the largest traditional banks in the country report "their profits this week , prompting CNBC 's Jim " Cramer Wednesday to review the investment case for tech-driven companies looking to disrupt historical financial players.
Host "Mad " Money nicknamed the following six companies "new banks ": PayPal , Square , Upstart , Affirm , Robinhood "Markets and SoFi " Technologies .
"Now is the right time to get new banking exposure, "Cramer said, as expectations for Wall Street banks are high as earnings season approaches. This means their actions could be affected if the results do not exceed expectations, he said, as JPMorgan " Chase Wednesday.
"If the others go like JPMorgan ... then it is possible that we still have an exodus of more than finance and one more fintech love affair, "Cramer says.
Here's how Cramer would play the landscape:
Buy it now The PayPal app displayed on an iPhone.Katja Knupper | DeFod Imagesi | Images
Cramer said that PayPal and SoFi are worth buying here.
PayPal has done a great job expanding its products to include new offerings such as the Add of a platform buy now, pay later, Cramer said, as well as offering cryptocurrency trading and high yield "savings accounts via a partnership with Synchrony Bank.
"Although the stock remains expensive here, I think it's worth buying now that it's down 17% from its highs, this is why we added a few for the charitable trust last week. "
SoFi, led by CEO Anthony Noto, also offers a range of services which now includes the sale of insurance policies, brokerage accounts and mobile money management, Cramer said.also on track to secure a banking charter, "he added.
However, SoFi shares have struggled to gain traction since the company completed a reverse merger for start trading on the Nasdaq in "June . Even though SoFi has benefited from Morgan Stanley analysts rating "its action as a buy , "it's still down nearly $ 10 from its highs earlier this year, " Cramer said.
The Other Guys Vlad Tenev, CEO and Co-Founder of Robinhood Markets, Inc., is shown on a screen during the IPO on the Nasdaq Market in Times Square in New York, United States, July 29, 2021.Brendan McDermid | Reuters
Cramer said he found Square "attractive " now that the company - which offers peer-to-peer payments,small business lending and equity and crypto trading - saw its stock drop around 16% from its August highs.
However, he said stated, "I like PayPal more than Square because it 's cheaper.
Upstart, a loan initiator who uses artificial intelligence to facilitate the process, should appear on investor buying lists, Cramer said. But with the stock up 746% year-to-date, "wait for a pullback and then pull the trigger " he said.
From Similarly, Cramer said he thinks investors should wait for a bit of a downturn. in shares of Affirm, an increasingly popular buying leader now, pay later space that marked high-profile deals with Amazon , Walmart and Target .
Robinhood, "a pioneer in commission-free trading, has big ambitions to become a " one-stop-money app "for consumers, Cramer said. Despite this, Cramer said it would take time to get there, and for America's leading securities regulator to look at its basic payment business model for order flow.
"Although Robinhood is not my favorite, it's way too important to ignore, "Cramer said.
Disclosure: Cramer's charitable trust owns shares of Amazon, Morgan Stanley, and PayPal.
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