Here’s Why Wedgewood Partners is Holding PayPal Holdings (PYPL)

Soumya Eswaran

Thu, Apr 17, 2025, 7:49 AM 2 min read

Wedgewood Partners, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, Wedgewood Composite’s net return was -6.3% compared to the Standard & Poor’s -4.3%, the Russell 1000 Growth Index’s -10.0% and the Russell 1000 Value Index’s 2.1% return for the same period. In addition, you can check the fund’s best 5 holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Wedgewood Partners highlighted stocks such as PayPal Holdings, Inc. (NASDAQ:PYPL). PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments. The one-month return of PayPal Holdings, Inc. (NASDAQ:PYPL) was -12.79%, and its shares lost 1.72% of their value over the last 52 weeks. On April 16, 2025, PayPal Holdings, Inc. (NASDAQ:PYPL) stock closed at $60.24 per share with a market capitalization of $60.057 billion.

Wedgewood Partners stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2025 investor letter:

"PayPal Holdings, Inc. (NASDAQ:PYPL) was a leading detractor from performance for portfolios during the quarter. The Company's branded checkout grew by a healthy +6% while total payment volumes grew by +7% during the Company’s most recent quarter. PayPal also outlined several reinvestment initiatives across its platform that continue to accelerate its branded checkout volume growth back to double digits. In addition, the Company has authorized nearly $20 billion in share repurchases which represents nearly a third of its market cap as of quarter end. We continue to hold PayPal as one of our largest active weights in portfolios. "

A consumer in a cafe paying for goods using a mobile payment app.

PayPal Holdings, Inc. (NASDAQ:PYPL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 94 hedge fund portfolios held PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of the fourth quarter which was 90 in the previous quarter. While we acknowledge the potential of PayPal Holdings, Inc. (NASDAQ:PYPL) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered PayPal Holdings, Inc. (NASDAQ:PYPL) in another article, where we shared the list of most undervalued quality stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.