Dave Inc. (NASDAQ:DAVE) is a small company ($178 million market cap) that’s not anywhere near the size of traditional big banks. Yet, it could be the next disruptor to go from a small cap to a big brother on the block. Overall, I am bullish on DAVE stock for the long term.
Dave Inc. is a fintech (financial technology) startup that “uses disruptive technologies to provide best-in-class banking services at a fraction of the price of incumbents.” Granted, you might not want to invest in Dave after the recent share-price rally. Nevertheless, I encourage you to check out Dave Inc., as this company should remind you of a similar fintech firm that went from unknown to superstar.
Dave is Like SoFi was a Few Years Ago
SoFi Technologies (NASDAQ:SOFI) was relatively unknown a few years ago. Now, it’s a serious contender that’s threatening to steal market share from traditional banks. Could Dave Inc. be the “next SoFi”?
It’s possible, as Dave looks a lot like SoFi Technologies once did. Remember, SoFi didn’t always have a banking charter and was, for a long time, basically just a personal finance app.
Furthermore, just as SoFi is working toward profitability, so is Dave. In fact, Dave Inc.’s GAAP third-quarter 2023 revenue grew by 7% quarter-over-quarter (QoQ), and the company’s net loss improved by 47% QoQ.
It’s not financial perfection, but it’s progress. Moreover, if you like your investments to have an artificial intelligence (AI) angle, Dave’s got you covered. Just recently, Dave Inc. announced a partnership with generative AI company Aisera to launch “DaveGPT,” a gen-AI assistant that “offers self-service customer inquiry resolution.” This certainly won’t be as popular as ChatGPT, but it might add some AI functionalities to the banking experience.
Conclusion: Should You Consider DAVE Stock?
DAVE stock recently rallied sharply, possibly based on Dave’s gen-AI connection. Consequently, some traders might choose to wait for a share-price pullback.
However, I think it’s fine to consider investing in Dave Inc. regardless of the current share price. With a small-sized stock position in Dave, you may have the golden ticket to the future of modern finance – or at least, a possible contender for the “next SoFi.”
