Why This 1 Unstoppable Stock Could Be the Next Bank of America

Bank of America (NYSE: BAC) is one of the largest global banks, with thousands of branches. It offers a wide range of financial products that help people save, borrow, and invest their money.

The stock has been sluggish to start the year and is down by 3%, but its long-term returns are solid. The bank stock is up by more than 50% during the past five years and has a 2.1% dividend yield.

This same financial stock is approaching a $400 billion market cap, which will make it harder for the company to deliver life-changing returns for new investors. People who want exposure to the financial sector and a promising long-term pick may want to consider SoFi (NASDAQ: SOFI) instead. Here's why.

This small fintech company is delivering tremendous growth

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SoFi is larger than most fintech companies, but its $25 billion market cap looks small when you compare it to Bank of America. Its online banking solutions let it offer higher interest rates on deposits and have more competitive products than traditional banks, which have higher overhead costs as a result of operating large networks of physical branch offices.

The online bank delivered 40% year-over-year revenue growth in the fourth quarter and secured its ninth consecutive quarter of profitability. SoFi's adjusted net income almost tripled year over year. This metric is more valuable than net income for this particular quarter, since SoFi had a one-time income tax benefit in Q4 2024 that distorts the year-over-year net income comparison.

SoFi's revenue and net income are growing at faster rates than those of Bank of America and other traditional banks. As more people tap into the benefits of online banking, SoFi should continue to gain market share and wind up with a more attractive price-to-earnings (P/E) ratio over time.

Here's what is fueling those numbers

SoFi's growth rates are good, and its underlying business suggests it can maintain those gains. The fintech company has 13.7 million customers after adding 1 million new members in Q4. That's the most customers SoFi has added in a single quarter, highlighting the growing mainstream acceptance of online banks.

The company is also delivering solid results across multiple product categories. Just like any traditional bank, SoFi helps people save, borrow, and invest money. The company also recently tapped into cryptocurrencies again, which can turn into a long-term tailwind once Bitcoin (CRYPTO: BTC) regains its momentum. SoFi said it closed the year with 63,441 crypto products, which means that many SoFi members are using crypto trading.

SoFi also saw strong demand across its product categories, with bank accounts, investment accounts, and credit card openings up by 33%, 28%, and 56% year over year, respectively. SoFi's products are getting more popular, and all that visibility directly translates into revenue and net income gains that can help the fintech stock outperform Bank of America and its peers.

Bank of America is an advertising partner of Motley Fool Money. Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.