President Donald Trump proposes a 10% cap on credit card interest rates for one year starting Jan. 20 to combat high rates. Capital One Financial (COF) shares plummeted 3% on Friday and 7% on Monday. COF is a major U.S. credit card issuer with $271 billion in card loans.

COF’s stock surged 37.7% in 2025, outperforming the S&P 500. With a large market share post-Discover Financial acquisition, COF’s valuation is above historical averages. The stock may be slightly overvalued but presents a buy-the-dip opportunity for long-term investors.

Trump’s rate cap proposal threatens COF’s revenue, with 70% coming from credit cards. A cap could slash income from revolving debt, leading to tighter underwriting and higher fees. However, the proposal’s enactment is unlikely, given congressional hurdles and industry opposition. Analysts view COF as a buy-the-dip opportunity with strong growth potential.

COF stands out as a top financial stock due to its credit card dominance and diversified revenue streams. Tech-driven approaches have boosted member loyalty and revenue growth. With a focus on data analytics and personalized products, COF targets significant synergies by 2027. YTD earnings jumped 47.3% with revenue growth and net interest margin expansion.

Analysts rate COF stock as a “Strong Buy,” with a mean price target of $277.36, representing a 20% upside from the current share price. Despite short-term volatility, COF’s strong fundamentals, credit performance, and diversification make it an attractive investment option.

Read more at Yahoo Finance: CapitalOne Is Tumbling on Trump’s 10% Card Rate Cap Threat. Should You Buy COF Stock?