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Despite Mr. Market’s rather muted reaction, PayPal Holdings Inc. (PYPL) recently delivered exactly the type of “shock the world” move Alex Chriss first promised when he took the reins as CEO, signing a multiyear deal with Alphabet Inc. (GOOGL) on digital commerce.

The partnership cements PayPal as a “key” PSP across products like Google Ads, Google Cloud, and Google Play. What exactly “key” means, we do not fully know yet. But we do know this. Last quarter, Google Ads generated $71.3 billion in revenue. Google Cloud brought in $13.6 billion.

Whether this means PayPal will now process 10% or 40% of payments, either way it likely represents a significant uplift to TPV. In other words, if you are part of the multi-billion user Google ecosystem using any of their products, chances are PayPal is now your payment processor.
 

On top of that, PayPal can leverage Google’s AI capabilities to enhance payment services and build out Agentic shopping — with the added bonus of not having to shell out tens of billions in capex to develop it from scratch. PayPal is another example of playing the BENEFICIARIES of AI without owning the companies forced to pick up the tab and erode earnings in the process.

Meanwhile, you still can’t give the stock away. For us, there is nothing to overthink with PYPL. Alex Chriss is a proven winner and continues to execute on everything he promised from the very beginning — and then some. The only problem is the market just can’t wait, at least not until the story is so obvious it hits them over the head.

PayPal actually reminds us a lot of Alibaba Group Holding Ltd. (BABA), which is likely just a few months ahead on the sentiment cycle. With Alibaba, we’ve just broken through denial and are starting the parabolic move back toward new highs.

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