It’s been the worst year for payments stocks in 15 years if you exclude the pandemic, according to J.P. Morgan analysts. And that could mean opportunity for investors who know where to look.

First, it’s worth unpacking why payment-technology and financial-technology stocks have struggled this year. Investors have worried about slowing growth and potential commoditization, and they’ve wondered whether new offerings around lending and other areas will pay off.

So how should investors respond heading into 2026? J.P. Morgan’s Tien-tsin Huang first recommends a classic play. Shares of Visa are “trading at a 10-year valuation floor relative to S&P 500,” despite boasting some standout metrics not just within the payments sector, but within the index as a whole. Only two other S&P 500 components offer both double-digit revenue growth and margins north of 50%, Huang noted.

Visa’s stock has underperformed the broader market this year, rising 3% as the S&P 500 has gained 17%. But Huang sees intriguing opportunity around the company’s work to “tokenize” payment credentials, which is the process of converting things like card numbers into more secure forms that will work for new types of online commerce. They could prove “foundational to agentic commerce,” Huang wrote, referring to the idea that artificial-intelligence agents could help with purchases.

He also recommends shares of Toast, which he just upgraded to overweight. “We’ve been eagerly waiting for the right time to take a seat at the Toast table, and with shares down 6% [year to date] despite estimates up 27%,” the time is now, according to Huang.

Toast makes payment-processing and other software for the restaurant industry. The company is “unburdened by legacy distribution” and technology, according to Huang, plus its brand has a strong reputation.

His other bullish picks are Corpay, which makes expense offerings and cracks Huang’s list for being a value play, and Block, the Square parent company whose stock he thinks screens well through the lens of growth at a reasonable price.

Meanwhile, Huang downgraded shares of PayPal Holdings and Fiserv to neutral, writing that it’s “too late to sell and too early to buy” them. PayPal shares have dropped 28% this year while Fiserv shares have lost 68%.

“While we still appreciate the ingredients PayPal is cooking with, it will take time for the bread to rise,” Huang wrote. And Fiserv is in the midst of a major reset, which is likely to mean an “investment/turnaround year featuring low-single total company revenue growth and down margins.”