AFRM Surges 11.4% on Renewed Amazon Pact and Earnings Beat: Is This the Start of a Bullish Rebound?

Summary
• Affirm Holdings (AFRM) surges 11.39% intraday to $73.72, marking its highest level in a month.
• Renewed Amazon partnership and Q4 earnings beat drive immediate momentum.
• Analysts upgrade AFRM to 'Buy' as valuation metrics suggest potential upside.

Affirm Holdings (AFRM) is experiencing a dramatic intraday rally, fueled by a strategic partnership renewal with Amazon and a robust Q4 earnings report. The stock’s 11.39% surge to $73.72 reflects renewed investor confidence in its buy-now-pay-later (BNPL) model. With institutional ownership at 69.45% and analyst upgrades, the stock’s trajectory hinges on sustaining momentum amid mixed valuation signals.

Amazon Partnership Renewal and Earnings Beat Drive AFRM's Surge
Affirm’s 12% surge follows a renewed five-year partnership with Amazon, a critical client in its BNPL ecosystem. The deal, announced on December 16, 2025, expands Affirm’s transaction volume potential, with 70% of its revenue derived from interest-bearing loans. Concurrently, Q4 earnings exceeded expectations: revenue grew 33.6% year-over-year to $933.34M, and EPS of $0.23 beat estimates by $0.12. Analysts at Mizuho and Susquehanna upgraded AFRM to 'Buy,' citing the renewed partnership and earnings resilience. The stock’s breakout above the 200-day moving average ($64.55) and Bollinger Upper Band ($71.90) signals short-term bullish momentum.

Consumer Finance Sector Rally as PYPL Gains 1.17%
The Consumer Finance sector, led by PayPal (PYPL) at +1.17%, saw broad-based gains as BNPL demand remains resilient. However, AFRM’s 11.4% surge outperformed sector peers, driven by its exclusive Amazon partnership and earnings beat. While PYPL’s growth is tied to broader fintech trends, Affirm’s near-term catalysts—strategic partnerships and margin expansion—position it as a high-conviction play in the space.

Options Playbook: High-Leverage Calls for Aggressive Bulls
• 200-day MA: $64.55 (below current price); RSI: 47.0 (neutral); MACD: -1.01 (bearish divergence).
• Bollinger Bands: $63.43 (lower) to $71.90 (upper); current price at 73.14 (above upper band).
• 30D support/resistance: $68.78–$69.10; 200D: $68.48–$69.61.

Top Options Picks:
1. AFRM20251226C75 (Call, $75 strike, 12/26 expiry):
- IV: 50.03% (moderate); Leverage: 37.72%; Delta: 0.43; Theta: -0.228; Gamma: 0.0616; Turnover: 85,695.
- Payoff at 5% upside (76.79): $1.79/share. This call offers high leverage and liquidity, ideal for capitalizing on a breakout above $75.
2. AFRM20251226C73 (Call, $73 strike, 12/26 expiry):
- IV: 50.62%; Leverage: 25.36%; Delta: 0.557; Theta: -0.2607; Gamma: 0.0611; Turnover: 35,123.
- Payoff at 5% upside: $3.79/share. This contract balances gamma and theta, making it suitable for a continuation of the current rally.

Aggressive bulls should prioritize AFRM20251226C75 for its high leverage and liquidity, while AFRM20251226C73 offers a safer entry for a pullback. Both contracts benefit from a 5% upside scenario, aligning with Affirm’s renewed partnership and earnings-driven momentum.

Backtest Affirm Holdings Stock Performance
The backtest of AFRM's performance following a 11% intraday surge from 2022 to now shows favorable results. The 3-Day win rate is 51.35%, the 10-Day win rate is 49.28%, and the 30-Day win rate is 53.42%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 11.59%, which occurred on day 59, suggesting that there is potential for gains even after the initial surge.

Bullish Momentum Favors Aggressive Longs; Watch $75.00 Level
Affirm’s 11.4% surge reflects a confluence of strategic and earnings-driven catalysts, with the stock poised to test its 52-week high of $100. The renewed Amazon partnership and Q4 beat validate its BNPL model, while analyst upgrades and institutional inflows reinforce conviction. However, the P/E ratio of 74.76 and Altman Z-Score of 2.8 signal valuation risks. Investors should monitor the $75.00 level as a critical support/resistance zone. For context, sector leader PayPal (PYPL) is up 1.17%, underscoring the sector’s resilience. Aggressive bulls may consider AFRM20251226C75 for a high-leverage play, while conservative investors should watch for a pullback to the 200-day MA before initiating long positions.