PayPal Holdings, Inc. (NASDAQ: PYPL) has an overlooked advantage in the artificial intelligence (AI) race — its vast customer base, argues Blockchain Founders Fund managing partner and Roundt
PayPal Holdings, Inc. (NASDAQ: PYPL) has an overlooked advantage in the artificial intelligence (AI) race — its vast customer base, argues Blockchain Founders Fund managing partner and Roundtable 100 Blue Ribbon Committee member Aly Madhavji.
In an interview with TheStreet Roundtable’s Alp Gasimov, Madhavji laid out a bullish case centered on PayPal’s existing reach, its PYUSD stablecoin and the potential to make payments more efficient.
His argument is that as AI becomes more widely available, building the technology is only part of the challenge. Getting that technology into the hands of a large customer base could prove more valuable.
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Madhavji said creating a major user base is becoming harder for companies, even as access to AI expands.
“It's actually getting much more difficult for companies to really generate and create a major user base,” he said.
The RTB100 analyst pointed to PayPal’s 439 million accounts as the foundation of his investment thesis. That figure describes accounts, rather than the number of people using its stablecoin.
For Madhavji, the opportunity comes from introducing new services to an audience PayPal already reaches. His focus is on what the company can do with that distribution, rather than expecting it to build a new audience from scratch.
Madhavji connected that customer base with PYUSD and PayPal’s role in payments for AI-driven commerce.
“So you take those 439 million accounts, and then you look at what they're doing with PYUSD, their stablecoin, being agent commerce rails.”
The RTB100 sees the payment infrastructure as a way to reduce costs and create more value for existing accounts — a potential business benefit from combining AI with crypto.
The distinction matters to his thesis: PayPal’s appeal is not simply that it has a stablecoin. It is that the company has an established audience through which new payment services could reach users.
A sign is posted in front of PayPal headquarters on February 02, 2023 in San Jose, California.Getty Images
Madhavji also cited $6 billion in free cash flow and a valuation of about 10 times earnings in explaining his view.
“It's actually trading, I would say, at a discount of what I think is actually undervalued.”
His bullish case rests on connecting that financial position with the potential of its existing customer network.
PYPL was trading at $55.51 at the time of recording, up 2.87% in a day.
Find PayPal's score on the Roundtable 100
The RTB100 committee's cases landed on a board in upheaval.
•Datadog (DDOG) rose 12 spots to take #1, leading a cybersecurity surge that put three security names in the top ten.• NVIDIA's 39-spot climb to #40 was the week's biggest gain; SAP's 31-spot rise to #39 was its biggest surprise.• Superplanet (SLE) crashed 71 places to #73, the week's hardest fall, as analysts judged its proposed Metaplanet takeover incomplete and its old leadership grade "too generous."• PayPal — the subject of Madhavji's bull case — slid 20 spots to #85, with analysts calling its reorganization "a plan, not proven acceleration."
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investments are subject to market risk. Always conduct your own research before making any investment decisions.
Disclosure: RTB Digital, Inc. (Nasdaq: RTB), publisher of the Roundtable 100, is itself a ranked constituent of the index. The Roundtable 100 is published for informational purposes only and is not investment advice, an offer, or a recommendation to buy or sell any security, commodity or digital asset. Rankings reflect the views of Roundtable analysts as of the ranking date. Investing involves risk, including loss of principal.
