As the S&P 500 treads water in early 2026, Wall Street is eyeing two fintech stocks with explosive upside potential. Block and Pagaya Technologies are forecast to soar as much as 65% and 195% respectively over the next 12-18 months, offering a stark contrast to the broader market's stagnation.

Block, formerly Square, has fallen dramatically from its 2021 peak, with shares down roughly 80% from all-time highs. The company's dual-platform strategy of Square Sellers for merchants and Cash App for consumers once drove meteoric growth, but recent years have been marred by profitability struggles and strategic missteps. Despite trading at a modest 1.7 times trailing sales, investors remain skeptical about Block's ability to reverse its fortunes.

The fintech sector's resilience amid persistent inflation and economic uncertainty has caught Wall Street's attention. Block's recent fourth-quarter results showed modest sales growth and improved operating margins, while the market cheered its workforce reduction from 10,000 to 6,000 employees. These cost-cutting measures signal a potential turnaround, though the company has struggled to execute on similar promises for years.