Affirm Stock Jumps on New AI Underwriting Model and Positive Analyst Actions

Shares of Affirm (AFRM) surged 5.0% in pre-open trading after the buy now, pay later company announced the launch of a new artificial intelligence model for real-time credit underwriting.

AI Model Boosts Purchase Volume

Affirm has deployed a transformer-based AI model designed to enhance its consumer credit assessment at U.S. checkouts. The company stated the model is built on 14 years of transaction-level data and evaluates the sequence and timing of events in a borrower's history, rather than relying on traditional static credit scores.

This more dynamic approach allows Affirm to approve more eligible applicants, including those with thin credit files or no FICO scores, who might have been declined by its previous system. According to the company, the initial deployment resulted in 3.4% more completed purchases in a test group compared to a control group, while maintaining comparable levels of credit risk.

Analysts Reiterate Bullish Stance

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The move was accompanied by positive sentiment from Wall Street analysts, adding to a constructive backdrop for the stock.

• DBS initiated coverage with a Buy rating on Tuesday.
• Wolfe Research's September 14 upgrade to Outperform with a $90 price target continues to influence trading. Analyst Darrin Peller cited a "more compelling" valuation and Affirm's position as a "structural winner."
• Citizens reiterated its Market Outperform rating and an $85 price target, raising its fiscal 2027 GAAP EPS estimate to $2.11 and introducing a fiscal 2028 projection of $3.06.

Broader Market Provides Tailwinds

Affirm's gains are occurring within a broadly supportive market environment. U.S. equity futures rallied sharply in pre-market, with the S&P 500 gaining 1.3% and the Nasdaq Composite up 1.6%, boosting risk appetite for growth-oriented fintech stocks. Other buy now, pay later firms were also trading higher, indicating positive sector-wide momentum.