Buy-now-pay-later companies just figured out how to make money
Theme 1: BNPL Sector Reaches Profitability Milestone as Consumer Adoption Accelerates
The sector is experiencing explosive adoption with 68% of consumers expecting to use BNPL more frequently if prices continue rising, while 66% of Gen Z leads adoption across new categories including medical expenses (51% of Gen Z usage) and essential services like rent and utilities (24% of all respondents).
Transaction volume has multiplied 20 times since 2019, creating a massive addressable market that extends far beyond e-commerce into everyday financial services.
Affirm's CEO emphasized strong consumer demand and confidence in credit quality with the statement "We feel quite excellent about our ability to get paid back on time," addressing previous investor concerns about default rates. The company's 44% volume growth and strategic partnerships with Shopify and Amazon demonstrate the scalability of the business model.
The regulatory environment remains favorable compared to traditional credit products, while the integration of BNPL into everyday spending categories creates multiple revenue streams and reduces dependence on discretionary retail spending.
Stocks that would benefit:
AFRM: Affirm Holdings - Leading the profitability transformation with demonstrated ability to generate positive GAAP net income while maintaining robust 44% volume growth. The company's proprietary AI-driven technology, including its ITACs risk model and AdaptAI promotions platform, provides a core competitive advantage in real-time underwriting and personalized offers, directly supporting the profitability thesis. Strategic partnerships with major platforms including Shopify and Amazon create sustainable competitive advantages and cross-selling opportunities that further enhance the company's ability to maintain profitability while scaling. Read More →
Theme 2: Quantum Computing Enters Commercial Viability Phase with Major Technological Breakthroughs
The sector is experiencing weekly developmental announcements rather than isolated breakthroughs, indicating sustained technological progress across multiple companies. D-Wave's 5,000-qubit gate-based architecture is delivering practical applications in finance, medicine, and logistics, while major cloud providers including AWS, Microsoft Azure, and Google Cloud have established credible quantum initiatives that validate commercial viability.
The timing coincides with shifting investor focus from generative AI to quantum computing as boardrooms begin inquiring about quantum strategies. Companies like Quantinuum are successfully bridging AI and quantum applications, demonstrating real-world business impact rather than theoretical research.
The market is supported by substantial enterprise partnerships and government contracts, with IonQ positioning to potentially deploy the first cryptographically significant quantum computers. This represents a watershed moment where quantum computing transitions from laboratory curiosity to business-critical infrastructure.
Stocks that would benefit:
QBTS: D-Wave Quantum - At the forefront of commercial quantum computing with proven 5,000-qubit systems delivering practical solutions across finance, medicine, and logistics sectors. The company's record Q1 2025 revenue of $15 million was primarily driven by its first Advantage system sale, demonstrating tangible commercial adoption of quantum technology. D-Wave's unique focus on annealing technology provides immediate value for complex optimization problems that other quantum approaches cannot yet solve, positioning it to capitalize on the quantum computing commercialization trend while many competitors remain in the research phase. Read More →
IBM: International Business Machines - Leveraging decades of enterprise computing experience and established corporate relationships to commercialize quantum solutions through its mature quantum cloud platform. IBM's differentiated technology portfolio, including its quantum systems integrated with Red Hat OpenShift, watsonx, and Granite models, creates a powerful hybrid quantum-classical computing ecosystem that enables enterprises to begin implementing quantum applications within existing workflows. This integration capability is critical for the commercial adoption phase of quantum computing, as it allows businesses to incorporate quantum advantages without completely overhauling their infrastructure. Read More →
RGTI: Rigetti Computing - Focused on full-stack superconducting quantum computing with an ambitious technology roadmap targeting a 36-qubit tiled system by mid-2025 and a 100+ qubit system by end-2025. The company's recent strategic collaboration with Quanta Computer and completion of a $350 million ATM equity offering have substantially improved liquidity and accelerated development timelines. Rigetti's focus on quantum cloud services and hybrid classical-quantum computing solutions positions it to benefit from growing enterprise demand for accessible quantum computing power without requiring companies to build their own quantum infrastructure. Read More →
Theme 3: Satellite Communications Revolution Accelerates with Direct-to-Smartphone Technology
The global satellite communications market is projected to exceed $20 billion in investments during 2025, with low-earth orbit (LEO) systems receiving billions from network operators and big tech firms. AST SpaceMobile's partnerships with major telecommunications providers validate the technology and provide clear revenue pathways, while the $100 million non-dilutive financing demonstrates institutional confidence without shareholder dilution.
The technology addresses a fundamental connectivity gap affecting billions of people in underserved regions, creating both humanitarian impact and substantial commercial opportunity. Unlike traditional satellite internet requiring specialized equipment, direct-to-smartphone connectivity leverages existing device infrastructure, dramatically expanding the addressable market.
The commercial launch timeline of early 2026 provides clear visibility into revenue generation, moving the sector from speculative to having tangible business prospects. The combination of proven technology, strategic partnerships, and secured financing creates a compelling investment framework.
Stocks that would benefit:
ASTS: AST SpaceMobile - Building the first space-based cellular broadband network designed for unmodified smartphones, targeting a massive global market with coverage gaps and underserved populations. The company's recent operational progress includes a strengthened balance sheet with over $874 million cash, successful Block 1 satellite deployment and testing, and acceleration of Block 2 manufacturing and launch plans. AST's technological differentiation through large phased array satellites enables broadband speeds and direct-to-device connectivity, positioning it uniquely against competitors focused on text-only or terminal-based solutions—directly addressing the investment thesis of expanding global connectivity through standard smartphones. Read More →
GSAT: Globalstar - Executing a multi-faceted growth strategy leveraging its unique globally harmonized spectrum and bent-pipe satellite architecture to expand core Mobile Satellite Services while launching next-generation Extended MSS Network capabilities. A significant wholesale agreement, accounting for 62% of H1 2025 revenue, provides substantial funding for network upgrades and new constellations. Globalstar's diversification into 2-way Commercial IoT and securing early commercial and government wins for its XCOM RAN technology positions it to benefit from the direct-to-smartphone connectivity revolution while maintaining stable revenue from existing services. Read More →
VSAT: Viasat - Undergoing a strategic transformation from a capital-intensive satellite operator to a more agile provider of multi-orbit, high-capacity connectivity solutions. The company is leveraging its advanced ViaSat-3 constellation, strategic third-party partnerships, and innovative L-band direct-to-device initiatives to reduce future capital outlays while expanding service capabilities. Viasat's diversified business model, including its rapidly growing Defense & Advanced Technologies segment with exposure to government and dual-use markets, provides multiple avenues to benefit from the satellite communications revolution while maintaining financial flexibility. Read More →
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