Overview
Baird has identified three stocks in the financial technology, payments and services sector that it views as potential outperformers as companies report second-quarter 2026 results. The firm says fintech sentiment is stabilizing as the recent enthusiasm for artificial intelligence has become less consistent, and it highlights that valuations remain reasonable for companies capable of sustaining more than 10% organic growth.
Corpay
Baird is constructive on Corpay and sees the potential for a second-quarter beat and a subsequent raise. The firm notes that consensus 2026 earnings-per-share expectations appear biased lower by roughly 1%.
Revenue growth at Corpay for the second quarter is expected to remain above 10% on an organic, constant-macro basis, while earnings growth could exceed 25% year over year. Baird points to strength in the Corporate Payments segment - which it says represents about 40% of total revenue - citing accelerating volumes at Citigroup in the second calendar quarter as evidence of robust activity.
After Corpay posted 16% organic constant-macro growth in the first calendar quarter, Baird now models roughly 15% organic growth for the second quarter, and expects acceleration in the second half of the year. The firm also notes macro factors that could help sentiment later in 2026, including higher fuel prices and interest rates.
Capital allocation actions may support per-share metrics: Corpay repurchased 2.4 million shares in the first quarter and appears to have repurchased another 0.7 million shares in early Q2. In its most recent reported quarter, Corpay recorded revenue of $1.26 billion, announced a $1.3 billion increase in its credit facilities and disclosed a partnership with BVNK to enable stablecoin settlement capabilities.
Block
Baird also expects Jack Dorsey’s Block to report a beat and lift guidance for 2026, with the firm suggesting consensus EPS estimates for the year could be biased up between 2% and 4%.
The firm anticipates an acceleration in Square gross profit - which accounts for roughly 35% of Block’s total gross profit - to about 11% growth in the quarter versus 9% in the first quarter, driven by the ISO and direct sales channel distribution. For Cash App - roughly 65% of total gross profit - Baird expects results to top Street estimates by around 5%, with Cash App gross profit growing about 33% year over year.
Baird projects adjusted EBIT margin will beat expectations, supported by strong incremental margins, a shift in the growth mix away from Borrow, benefits from restructuring, and lower stock-based compensation. Recent product and commercial developments highlighted by Baird include Square integrations with ChatGPT and Claude for sellers and Square being chosen by Sherwin-Williams as a payment solutions provider. The firm has raised its price target on Block’s shares to $100.
Mastercard
For the payments processing giant, Baird expects a similar "solid beat and raise" outcome. The firm points to accelerating second-quarter U.S. volumes across major banks and believes Street second-quarter assumptions are conservative when it comes to cross-border revenue and operating margins.
Baird suggests that investor sentiment could improve as attention broadens to high-quality names outside of artificial intelligence and year-over-year comparisons ease in the second half of the year. The firm raised its price target on Mastercard to $680, and the note also records that Clear Street initiated coverage of the company with a buy rating. Separately, Mastercard is reportedly exploring a sale of a majority stake in its UK payments subsidiary, Vocalink.
Context and valuation
Baird frames these selections within a view that fintech sentiment is improving as the AI trade has become less consistent and that valuations for the named stocks remain reasonable for companies capable of exceeding 10% organic growth. The firm expects company-specific dynamics and macro developments to determine whether results produce upward revisions and improved investor sentiment into the second half of 2026.
Summary takeaway
Baird highlights Corpay, Block and Mastercard as the names in the fintech and payments ecosystem with the clearest potential for second-quarter 2026 beats and raises, pointing to segment strength, recent product and commercial wins, share repurchases and measures of margin improvement as the key supporting factors.