Core Insights - Wedgewood Partners anticipates stronger market volatility in the coming years and has moderated its enthusiasm for investments [1] - The Wedgewood Composite returned -1.8% in Q4 2025, underperforming compared to the S&P 500's 2.7% and other indices [1] - The firm's focus on high-quality stocks has historically been successful since 1992, but faced challenges in 2025 due to poor stock selection and underweight positions in AI stocks [1] Company Performance - PayPal Holdings, Inc. was highlighted as a performance detractor in Wedgewood's Q4 2025 investor letter [2][3] - PayPal's stock closed at $56.88 on January 16, 2026, with a one-month return of -4.88% and a 52-week loss of 38.04% [2] - The company reported +8% volume growth in its branded checkout portfolio, but experienced a slowdown in volume late in the quarter due to a weaker macro environment [3] Investment Strategy - Wedgewood Partners trimmed its PayPal positions during the quarter, citing concerns over slowing transaction volumes and increased expenses impacting profit growth [3] - PayPal's investments in the emerging agentic commerce industry, including partnerships with AI developers, were noted as a strategic move, but raised concerns about future profitability [3]

Company Overview - Payoneer reported Q3 revenue of $270.9 million, a 47% increase year-over-year, but annual revenue growth for 2025 was only 0.47%, indicating stagnation [2] - PayPal reported Q3 revenue of $8.42 billion, up 7.3% year-over-year, and beat analyst estimates in all four quarters of 2025 [5] Earnings Performance - Payoneer's quarterly earnings per share (EPS) fell from $0.11 in Q3 2024 to $0.04 in Q3 2025, with full-year EPS declining 43.8% from $0.33 in 2024 to $0.19 in 2025 [2][3] - PayPal's full-year EPS decreased by 21.3% from $4.98 in 2024 to $3.92 in 2025, marking the lowest EPS since 2020 [5] Operational Metrics - Payoneer's operating margin is at negative 3%, indicating losses on core operations, while its return on assets is 1.08% [3] - PayPal's operating margin is 19.2% and return on equity is 24.4%, reflecting stronger operational health compared to Payoneer [6] Stock Valuation - Payoneer trades at a trailing P/E of 30x, which is considered expensive given its stalled revenue growth [3] - PayPal trades at a trailing P/E of 11.4x and a forward P/E of 9.8x, suggesting the market anticipates slower growth ahead [6] Insider Activity - Payoneer insiders, including CEO John Caplan and other executives, sold shares during the stock's 48% annual decline, with no insider purchases reported [4] Market Outlook - The stablecoin market remains speculative, with low odds assigned to major tech platforms launching USD stablecoins in 2026 [8] - Payoneer is viewed as a higher-risk, higher-reward investment if stablecoins reshape B2B payments, while PayPal is considered a safer hold for profitability and scale [10]

Core Insights - PayPal Holdings, Inc. (NASDAQ:PYPL) is considered one of the most undervalued fintech stocks currently available for investment [1] - Analysts from Raymond James and Stephens have maintained a Hold rating on PayPal, with price target adjustments reflecting cautious sentiment towards the stock [1][2] Analyst Ratings and Price Targets - Charles Nabhan from Stephens lowered the price target for PayPal from $75 to $65 while reiterating a Hold rating [1] - Raymond James also maintained a Hold rating without disclosing a price target, indicating a cautious approach as the company nears its fiscal Q4 2025 earnings release [1][2] Financial Performance and Growth Estimates - Raymond James has reduced Branded Total Payment Volume growth estimates by 300 basis points to 2% for Q4 2025, citing management's comments on expected slower growth [2] - The firm anticipates that low single-digit growth will continue into the first half of 2026 due to macroeconomic pressures and slower adoption of new products [2] Sector Outlook - Stephens acknowledges that 2025 was a challenging year for the fintech sector but sees potential for improved investor sentiment and better returns in 2026 [3] - PayPal operates a technology platform that facilitates digital payments for both merchants and consumers, positioning it within a growing market [3]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] Group 1: AI and Energy Demand - AI technologies, particularly large language models like ChatGPT, are extremely energy-intensive, with data centers consuming as much energy as small cities [2] - The increasing demand for AI is straining global power grids, leading to rising electricity prices and a need for utilities to expand capacity [2] - Industry leaders, including Sam Altman and Elon Musk, have highlighted the critical link between AI development and energy availability, warning of potential shortages [2] Group 2: Investment Opportunity - A specific company is positioned as a key player in the AI energy sector, owning critical energy infrastructure assets that will benefit from the anticipated surge in energy demand from AI data centers [3][7] - This company is not a chipmaker or cloud platform but is described as a "toll booth" operator in the energy market, profiting from the increasing need for electricity [5][6] - The company is debt-free and has significant cash reserves, equating to nearly one-third of its market capitalization, making it an attractive investment option [8] Group 3: Market Position and Growth Potential - The company is involved in large-scale engineering, procurement, and construction (EPC) projects across various energy sectors, including nuclear energy, which is crucial for America's future power strategy [7] - It has a substantial equity stake in another AI-related venture, providing investors with indirect exposure to multiple growth opportunities without high premiums [9] - The stock is currently undervalued, trading at less than seven times earnings, which presents a compelling investment case given its ties to the booming AI and energy sectors [10] Group 4: Future Trends - The ongoing AI infrastructure supercycle, combined with the onshoring boom driven by tariffs, is expected to create significant growth opportunities for the company [14] - The influx of talent into the AI sector is anticipated to drive rapid advancements and innovation, further solidifying the importance of energy infrastructure in supporting this growth [12]

Core Insights - PayPal has experienced positive earnings surprises over the last two quarters, yet investor sentiment remains cautious regarding the company's growth prospects, leading to an 18% decline in stock value [1]. Company Performance - Despite recent positive earnings, PayPal's stock has decreased by 18%, indicating investor skepticism about future growth [1]. Analyst Background - The article highlights the author's extensive experience in finance, particularly in oilfield and real estate industries, and their recent focus on equity research for a Dubai-based family office with over $20 million in assets under management [1].

Core Viewpoint - Gruppo Caltagirone, a significant investor in Monte dei Paschi di Siena, clarified that speculation regarding a conflict with the bank's CEO, Luigi Lovaglio, is unfounded, emphasizing that the board is simply engaged in routine discussions [1] Group 1 - Gruppo Caltagirone is a major investor in Monte dei Paschi di Siena [1] - The company stated that there is no clash with CEO Luigi Lovaglio [1] - The board's activities are characterized as normal discussions rather than conflicts [1]

Group 1: Market Developments - Polygon Labs is acquiring Coinme and Sequence for $250 million to enter the stablecoin-based payments market, aiming to become a leading avenue for stablecoin transactions globally [1] - The year 2026 is anticipated to be pivotal for stablecoins, transitioning from a trading tool to a payment mechanism, with several new stablecoin projects launched since December 2025 [2][3][5][6] Group 2: New Stablecoin Projects - SoFi Bank launched SoFiUSD, a fully reserved U.S. dollar-pegged stablecoin, on December 18, 2025, marking it as the first national bank to issue such a stablecoin [3] - The Pakistani government announced a partnership to integrate the USD1 stablecoin into its digital payment infrastructure on January 14, 2026 [4] - Wyoming's official Frontier stablecoin began its public launch in early January 2026 after testing phases [6] Group 3: Market Dynamics and Competition - The stablecoin market is currently dominated by Tether (USDT) and U.S. Dollar Coin (USDC), which account for most of the market cap, despite the emergence of new stablecoins [6] - Experts suggest that while the market does not need numerous stablecoins, there is a demand for niche stablecoins tailored for specific use cases, such as DeFi yields and local regulations [7][19] - Competition is expected to increase with new entrants like PayPal's PYUSD and World Liberty Financial's USD1, which may erode USDT's market share [18] Group 4: Adoption and Integration - Merchants are likely to prefer stablecoins with deep liquidity and clear compliance, focusing on those that can seamlessly integrate into existing payment systems [7][9] - Stripe has introduced stablecoin-based accounts for clients in over 100 countries, allowing customers to pay with stablecoins while merchants settle in fiat [8][9] - The integration of stablecoins into payment systems is seen as a way to reduce foreign exchange costs and enable faster settlements for merchants [15][16] Group 5: Regulatory Environment - Regulatory clarity from the U.S. and Europe is fostering bullish sentiment and adoption of stablecoins [17] - A new draft bill from the Senate Banking Committee may impose restrictions on digital asset service providers regarding interest payments on stablecoins, potentially affecting yield-bearing coins [11] Group 6: Investment Opportunities - Investment opportunities are emerging in startups focused on distribution, compliance, and workflow integration within the stablecoin ecosystem [13] - Venture capital is expected to flow into companies that facilitate merchant acceptance of stablecoins for payroll and treasury management [20]

PayPal - PayPal is projected to achieve record-breaking revenue of $33.3 billion in the current fiscal year and is on track to match its previous profit peak by fiscal 2025 [1] - Despite market concerns regarding competition and cryptocurrency, PayPal maintains a strong share of the global online payment market, holding just under 50% [7] - Analysts forecast continued growth for PayPal, predicting revenue of $41 billion and net income of $5.8 billion by 2028 [8] - The current stock valuation is less than 10 times the projected per-share profit of $5.79, indicating significant upside potential as it is 24% below analysts' average price target of $73.94 [9] SoFi Technologies - SoFi Technologies has seen substantial growth, increasing its customer base from 704,000 in early 2019 to over 12.6 million currently [3] - The company is positioned well within the digital banking sector, appealing to a digitally native audience of 260 million adults in the U.S. [2] - Despite its growth, SoFi's existing customers typically engage with less than two types of accounts or products, suggesting room for expansion [2] Upstart - Upstart utilizes an AI algorithm for credit scoring, resulting in 43% more loan approvals without additional defaults, and over 90% of its approvals are fully automated [11] - The company has processed more than double the number of loans in the first three quarters of last year, with loan conversion rates improving from 15.3% to 21.2% [13] - Upstart's stock has experienced volatility since its 2020 public offering, reflecting its adaptive algorithm responding to economic conditions [12]

Core Insights - Rohini Jain's career trajectory highlights the importance of mentorship and strategic career moves in achieving executive roles in finance [2][7]. Group 1: Career Progression - Rohini Jain began her career in manufacturing at GE, which provided her with essential finance training and operational discipline [6]. - She transitioned to technology companies, driven by opportunities for growth and mentorship from leaders who advised her to prioritize skill development over salary [7]. - Jain became CFO of PayPal in 2024, where she contributed to significant revenue growth from $10 billion to $30 billion during her tenure [3][8]. Group 2: Skills and Expertise - Jain's experience in scaling operations is a key factor in her appointment as CFO at Bill, a financial automation software provider [8]. - She possesses deep expertise in fintech and has held roles beyond finance, including operations, which enhances her understanding of product development and market strategies [9].

Group 1 - The target price for PayPal has been lowered from $77 to $61 [1] - The rating has been downgraded from "Outperform" to "Neutral" [1]