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The investor famous for predicting the 2008 housing crash is making another contrarian call, this time in beaten-down fintech.
When Michael Burry bets against the crowd, people pay attention. The hedge fund manager, who became a household name after his “Big Short” wager against the U.S. housing market, disclosed a new position in PayPal Holdings (PYPL) and offered a clear-eyed take on why now is the time to buy.
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Burry stated that the selloff in software and fintech stocks hasn’t been driven by broken businesses. It’s been a technical mess, and he thinks it’s almost over.
In a post on his Substack, Burry argued that a chain reaction between falling stock prices and stress in software company debt created a “reflexive positive feedback loop.” Basically, falling prices triggered additional selling pressure, which pushed prices lower, and so on.
Retail investors pulling money from private credit funds over the past few months accelerated that dynamic. Many of those loans were tied to software companies, which added pressure to an already fragile setup.
“I do not believe the technical pressures brought on by the private credit/software debt issues are big enough to affect these stocks for much longer,” he wrote, according to his Substack.
One reason Burry specifically likes PYPL stock here is that the fintech giant is not exposed to private credit markets, which insulates it from the very problem he thinks created this buying window in the first place.
He disclosed a roughly 3.5% position in PayPal, while also holding stakes in Fiserv (FISV), Adobe (ADBE), Autodesk (ADSK), and Veeva (VEEV). Notably, Burry also disclosed plans to add positions in Salesforce (CRM) and MSCI (MSCI).
Let me be clear: PayPal isn’t without challenges.
Online branded checkout volume grew just 1% year-over-year (YoY) in the fourth quarter of 2025, down sharply from 5% in the third quarter.
PayPal CFO Jamie Miller cited a weak U.S. retail environment, slowing international growth, particularly in Germany, and a pullback in high-growth verticals like travel and crypto.
“Our execution is not yet where it needs to be,” Miller said on the call.
But zoom out, and a different picture emerges.
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Venmo revenue grew roughly 20% YoY to $1.7 billion in 2025.
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Buy Now, Pay Later (BNPL) volume surpassed $40 billion, also up more than 20%.
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The company’s enterprise payments business returned to double-digit volume growth.
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And PayPal generated more than $6 billion in adjusted free cash flow for the year.
PayPal is a company with genuine problems in one segment but strong, diversified profit growth everywhere else. The fintech behemoth brought in Enrique Lores as president and CEO in March 2026. Lores, who previously served as board chair, comes with a track record of operational discipline and large-scale transformations.
At the Wolfe FinTech Forum in March, Miller described the priority simply: “Focus and execution.”
The company has identified three areas where it believes the most improvement is possible in branded checkout: consumer experience, product presentment, and selection.
Where all three have been deployed together, PayPal has seen branded checkout volume grow at double-digit rates, significantly outpacing local markets, according to the management team.
Burry isn’t calling PayPal a perfect business. He’s saying the stock has been caught in a technical storm that doesn’t reflect its fundamentals.
With PYPL down 83% from its 2021 peak, $6 billion in annual free cash flow, a newly initiated dividend, and $6 billion in share buybacks planned for 2026, the math on valuation has shifted considerably.
Out of the 43 analysts covering PYPL stock, five recommend “Strong Buy,” two recommend “Moderate Buy,” 31 recommend “Hold,” one recommends “Moderate Sell,” and four recommend “Strong Sell.” The average PYPL stock price target is $50.70, marginally below the current price of about $51.50.
Whether the branded checkout business can accelerate remains the central question. But Burry’s bet suggests one of the market’s sharpest contrarian minds thinks the worst of the selling is already behind us.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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