What Offers PayPal (PYPL) a Meaningful Long-Term Optionality?

Core Insights - Longleaf Partners Fund reported a return of 3.35% in Q4 2025, outperforming the S&P 500's 2.66% but underperforming the Russell 1000 Value Index's 3.81% return, indicating a challenging year without standout performers [1] - The firm emphasizes strengthening portfolio outcomes rather than chasing short-term winners, advocating for a focus on real companies during periods of excessive speculation [1] Company Performance - PayPal Holdings, Inc. (NASDAQ:PYPL) was identified as a performance detractor in 2025, with a one-month return of -4.88% and a 52-week loss of 38.04%, leading to a market capitalization of $54.337 billion [2][3] - Despite operational progress in stabilizing transaction margins and improving cost discipline, PayPal's growth in branded checkout volume was disappointing, leading to negative market sentiment [3] Market Sentiment and Hedge Fund Interest - PayPal is not among the 30 most popular stocks among hedge funds, with 86 hedge fund portfolios holding the stock at the end of Q3 2025, a slight decrease from 89 in the previous quarter [4] - While acknowledging PayPal's potential, there is a belief that certain AI stocks present greater upside potential with less downside risk [4]