MW Could Stripe 'salvage' PayPal? What Wall Street has to say about the latest takeover talk.

By Emily Bary

PayPal has underinvested in its consumer business, an analyst says. But Stripe could still find value in it.

PayPal has been speculated as an acquisition target following weak stock performance and a recent leadership change.

PayPal Holdings' stock took another turn higher on Tuesday after a new report offered more specifics around the company's potential as a takeover target.

Bloomberg News reported that payment processor Stripe had expressed interest in purchasing all or part of PayPal. That followed a Monday report in which Bloomberg said that PayPal (PYPL) had met with bankers about various bouts of unsolicited interest.

See also: PayPal's stock pops on takeover hopes. Here's who could swoop in with a purchase.

PayPal shares rose 6.7% in Tuesday trading after gaining 5.8% on Monday.

Wall Street had been speculating about a possible breakup or takeover of PayPal even before this week. Shares are down more than 80% from their all-time high achieved in 2021, and the company announced earlier this month that Enrique Lores, who formerly led HP $(HPQ)$, would be taking over as its CEO. Given PayPal's struggles to defend its turf in a changing payment-technology landscape, as well as Lores's lack of experience running a financial-technology company, analysts have been thinking for weeks that PayPal's board was contemplating a breakup.

Don't miss: Is PayPal bound for a breakup? Why the company's problems seem so hard to fix.

Representatives for PayPal and Striple declined to comment on Tuesday's report.

Baird's Colin Sebastian seemed to think a potential transaction would be reasonable.

"Stripe has arguably the strongest developer and merchant-centric payments infrastructure globally," he wrote in a note to clients. "But it lacks a large-scale authenticated consumer network, consumer brand and the data flywheel that a two-sided network could provide."

Building up a consumer presence like what PayPal has "would likely take many years [and] tens of billions in investment, with no guarantee of success," Sebastian added.

Stripe is already processing a substantial amount of e-commerce volume through its partnership with Shopify (SHOP), according to Sebastian. Adding PayPal to the mix might allow the company to "transact close to 50% of global e-commerce volumes" at a particularly intriguing time - when the market is paying more attention to the potential of agentic commerce, or the idea that artificial intelligence could make shopping decisions for consumers.

Sebastian himself has a neutral rating on PayPal's stock, lamenting some strategic choices that failed to pan out, in his view. For one, PayPal, under earlier leadership, arguably spent too long pivoting toward services for merchants and, in turn, stopped prioritizing consumer innovations.

But that doesn't mean all hope is lost.

"We think there is a great opportunity to salvage what is still one of the largest e-commerce platforms on the planet," Sebastian wrote.

Read: Financial stocks are off to their worst yearly start in a decade. How to spot value.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 24, 2026 19:13 ET (00:13 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.