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PayPal (PYPL) is the primary focus, with PayPal stock trading at $50 per share at a 9.3x trailing P/E valuation, while Burry holds bullish positions and major investors like Dalio and Yacktman bought in Q4 2025.
PayPal’s turnaround prospects are improving as the company implements new leadership, separates Venmo into a standalone unit, and pursues ad-tech opportunities powered by AI, signaling a strategic shift after years of underperformance.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and PayPal wasn't one of them. Get them here FREE.
Dr. Michael Burry of The Big Short fame has been making huge headlines in the past year, most notably for his bearish views on the AI trade. With bearish put options against two of the highest flyers in all of tech in recent years (GPU juggernaut Nvidia (NASDAQ:NVDA) and AI software government contractor Palantir (NASDAQ:PLTR)), it certainly feels like Burry and the rest of the skeptics on the hottest names in tech could be waiting a very long time.
Either way, I do think that it's going to be fun to see what happens with Burry's bearish bets as we move through the year. Will a big appreciation in the names cause the man to cover his puts? Or will he double down on specific heated names or the broad semi scene as a whole? I guess we'll have to wait and see.
In a prior piece, I cited that it's his long picks that have been most interesting to me, and probably most other investors who would rather go long than time a peak in companies that might stay irrationally elevated for longer than one can stay liquid. If you're going to bet against a firm with bearish put options, you're going to need plenty of liquidity. Burry seems to have it, but for the rest of us, I do think Burry's bullish bets could be where the timeliest of opportunities lie.
And PayPal (NASDAQ:PYPL) stands out as the most exciting of his deep-value bets in software, at least in my view. Now, the ailing digital payments firm is not going to be for everyone. It's not hard to imagine many dip-buyers over the years who've given up on the company. Doubling down on further dips has led to nothing but pain, it seems. In any case, I must say that the turnaround odds are starting to look quite good for PayPal when you consider the big moves going on behind the scenes.
Of course, PayPal's troubles started well before AI caused a meltdown in the software stocks. The fintech fumble has been long and drawn out. It's hard to believe that it's been nearly five years since shares of PayPal saw all-time highs.
I don't think the firm is content just sitting around at these depths, more than 80% from its lockdown-era heights of more than $300 per share.
With new leadership, a strategic reorganization (separating Venmo into its own standalone business unit), and plans to embrace new tech (think the move into the ad-tech space), I do like where PayPal could be headed from here. I certainly like the price of admission, as do so many other smart money managers who aren't named Michael Burry.
In the fourth quarter of 2025, several notable big-money managers loaded up on PayPal shares, from Bruce Richards of Marathon Asset Management to the great Donald Yacktman and Ray Dalio. Some big names have been circling around PayPal of late. But just because the smart money is buying doesn't mean investors should follow without a game plan, especially as shares stay stuck in multi-year depths.
As the AI-driven spill in software coincides with company-specific issues over at PayPal, especially after its last tough quarter, I do think that the name is starting to get absurdly oversold with a moat that's underestimated. Sure, it might be getting tougher to carve out a moat in payments these days, but PayPal still has the user base and the tech touch that might be able to turn the tables around.
The Venmo shift is an interesting first step. What's more exciting, though, is how PayPal can use AI to excel in ad-tech. I don't think there's all that much hope priced in at $50 per share and 9.3 times trailing price-to-earnings (P/E). The company's making real money, and there is a serious push for change.
This analyst's 2025 picks are up 106% on average. He just named his top 10 stocks to buy in 2026. Get them here FREE.