Why Affirm (AFRM) Stock Is Declining Today

Recent Developments

Affirm (NASDAQ: AFRM), a company specializing in buy now, pay later services, experienced a 6.2% drop in its share price during the afternoon trading session. This decline followed a surge in market volatility after former President Donald Trump suggested implementing a one-year 10% ceiling on credit card interest rates.

Initially, Affirm’s stock saw an uptick as investors speculated that restrictions on traditional credit card rates might encourage more consumers to turn to alternative payment providers like Affirm. However, the early gains quickly dissipated as uncertainty grew regarding the potential regulatory consequences and the likelihood of the proposal becoming law. The downturn was not unique to Affirm; other companies in the buy now, pay later sector also faced declines.

By the end of the trading day, Affirm’s shares closed at $76.49, marking a 6.5% decrease from the previous close.

Market Perspective

Affirm’s stock is known for its significant volatility, having experienced more than 50 price swings greater than 5% over the past year. In this context, the latest movement suggests that while the news is notable, it does not fundamentally alter the market’s view of the company.

The most substantial price jump in the past year occurred five months ago when Affirm’s shares surged 12.7% after the company posted outstanding second-quarter results that exceeded Wall Street’s expectations and reported a profit.

During that quarter, Affirm reported revenue of $876.4 million, representing a 33% increase compared to the previous year and surpassing analyst forecasts. The company also achieved a GAAP profit of $0.20 per share, a significant improvement from the $0.14 per share loss in the same period last year, and well above what analysts had anticipated. Adding to the optimism, management issued a positive revenue outlook for the upcoming third quarter, projecting $870 million at the midpoint, which was higher than consensus estimates.

Since the start of the year, Affirm’s stock has risen 3.1%. However, at $76.33 per share, it remains 17.2% below its 52-week peak of $92.18 reached in September 2025. An investor who purchased $1,000 worth of Affirm shares five years ago would now have an investment valued at $784.91.

Industry Insights

The 1999 book Gorilla Game accurately foresaw the dominance of Microsoft and Apple in the tech sector by identifying early platform leaders. Today, enterprise software companies integrating generative AI are emerging as the next industry giants.