Why is PayPal surging today?

PayPal jumped nearly 7% on Tuesday after Bloomberg reported that Stripe is weighing a possible acquisition of the payments company. The report cited people familiar with the matter and said talks are still in early stages.

Stripe is considering buying all of PayPal or only certain parts of the business. The market reacted fast with traders pushing the stock higher within hours of the headline.

The spike came one day after separate reports said buyer interest in PayPal had picked up following its recent stock slump. The company’s stock has fallen more than 19% since the start of the year. It has also lost almost a third of its value in 2025 alone.

Earlier this month, shares dropped again after weak profit guidance. The board also named HP CEO Enrique Lores as the new chief executive, with a start date set for early March.

Stripe weighs deal as valuation climbs

Stripe’s interest lands at a time when its own valuation just surged. On Tuesday, the fintech firm hit a $159 billion valuation after completing a secondary stock sale for employees and shareholders.

That is up sharply from $91.5 billion a year ago. In a business update, Stripe said its revenue suite is on track to reach a $1 billion annual run rate this year.

Stripe ranked 10th on CNBC’s Disruptor 50 list last year. It also acquired billing startup Metronome in January. Co founder and president John Collison said that the company is not aiming for an IPO right now. He said going public would sidetrack product and business growth.

Bloomberg reported that Stripe is reviewing whether to buy the full PayPal platform or select segments.

Analysts flag value as AI fears shake markets

PayPal was founded in the late 1990s and became an early leader in digital payments. Today, it faces slowing growth and intense competition as customers shift to other payment options. Analysts at Mizuho Securities said the stock is “deeply undervalued given that it is one of four globally recognized payment networks.”

They noted that PayPal processes nearly $2 trillion in annual transaction volume and operates Venmo, which they called the “most prominent US P2P network.”

KBW analysts told clients that PayPal holds scarce and strategic network assets. They wrote that the company could matter for firms “trying to play a bigger role in agentic commerce.”

The renewed interest comes as payment and software stocks slid Monday after Citrini Research published a report outlining risks from artificial intelligence.

The report described a scenario where AI agents try to cut costs for users by removing transaction fees charged by processors such as Mastercard and Visa.

“We are certain some of these scenarios won’t materialize,” Citrini wrote. “As investors, we still have time to assess how much of our portfolios are built upon assumptions that won’t survive the decade.”

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