Affirm Holdings (AFRM) Soars 4.84% on Costco Partnership, Q3 Earnings

Affirm Holdings (AFRM) surged 4.84% today, marking its third consecutive day of gains, with a cumulative increase of 21.85% over the past three days. The share price reached its highest level since March 2025, with an intraday gain of 7.79%.

The strategy of buying AFRM shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a 7.56% annualized gain. This result indicates the effectiveness of this approach, although the returns were not significantly high. Here's a breakdown of the strategy's performance:

Recent High Point Identification: The strategy involves identifying the recent high point for AFRM shares. In the backtest, this was successfully done, allowing us to simulate a purchase at the high point.

One-Week Holding Period: After purchasing the shares at the recent high, the strategy involves holding them for 1 week. This period was also accurately replicated in the backtest.

Annualized Returns: The annualized return for this strategy over the past 5 years was 7.56%. This indicates a positive performance, but the returns were not exceptionally high.

The strategy's performance was influenced by AFRM's volatility, which provided opportunities for profitable trades. However, the consistency of high returns was lacking, indicating that while there was potential for gains, they were not consistently high. This is a valuable insight for investors looking to leverage AFRM's volatility in their investment strategies.

Affirm Holdings' recent stock price movement can be attributed to several key factors. The company has formed new strategic partnerships, notably with Costco, which has contributed to stock price increases. This partnership allows Costco members to use flexible payment plans for purchases over $500 made online. Such collaborations have led to heightened investor interest and positive market sentiment.

Additionally, Affirm's fiscal Q3 results showcased strong revenue growth, improved margins, and rising transaction volumes, particularly from loyal, repeat customers. This performance has positively impacted the stock price as investors react to the company's financial health. The combination of strategic partnerships and strong financial performance has driven Affirm Holdings' stock price upward in recent months.