Per Bloomberg, discussions are still at an early stage and there is no certainty a deal will happen. Both companies declined to comment.

Shortly after, PayPal shares rose 6.7% to $47.02 in New York on Tuesday. That gives the company a market value of about $43.3 billion.

Stripe, which is still privately held, recently confirmed a $159 billion valuation in an employee tender offer. The company was founded by brothers Patrick Collison and John Collison. It has grown into one of the most valuable financial technology firms in the world.

Speaking this week, Patrick Collison said: “PayPal has had, obviously, a tough time over the past few years and the landscape has changed quite a bit with Apple Pay and Google Pay and everything like that. I can’t talk about any, you know, M&A hypotheticals but they’ve definitely had a tough time.”

PayPal was founded in the late 1990s and helped build early online payments. In recent years, however, it has faced slower growth.

Digital wallets such as Apple Inc.’s Apple Pay and Alphabet Inc.’s Google Pay have taken market share. The company’s fourth-quarter revenue and profit fell short of analysts’ estimates. Payment volumes have also slowed.

At the same time, PayPal is changing its leadership. Enrique Lores will become president and chief executive on March 1, replacing Alex Chriss, who was removed earlier this month. David Dorman has been appointed board chair.

Stripe, meanwhile, has continued to expand. The company processed $1.9 trillion in payment volume in 2025. It has also secured a US national bank trust charter for its stablecoin subsidiary, Bridge, showing plans to strengthen its role in regulated digital payments.

If the acquisition of PayPal by Stripe proceeds, the transaction could rank among the largest deals in the financial technology sector.

The focus is tougher this time because Alphabet’s recent surge has challenged long-held beliefs about first mover advantage.

Across Big Tech, spending plans are expanding at a rate the sector has never seen. Microsoft, Meta, Amazon and Alphabet are expected to raise their combined investment in AI by about 30% this year, pushing total outlay beyond $500 billion. 

This explains the unease on Wall Street. Investors are no longer impressed by scale; they want results from these Big Tech earnings.

Microsoft, once viewed as the early winner after backing OpenAI, is now being questioned. Its shares and Meta’s have both fallen more than 6% over the past three months of 2025. 

Amazon, helped by its November deal with OpenAI, edged up 5.1%, while Alphabet’s stock climbed nearly 29%, driven by strong feedback on Google’s Gemini 3 model and its deal to power Apple’s revamped Siri.

“Alphabet has the upper hand in the AI race as investors recognize that proprietary ecosystems, such as Apple and Search in Google, are tough to penetrate,” said David Wagner, head of equities at Aptus Capital Advisors. “Like in the internet boom, the first-mover advantage doesn’t always win the marathon.”

Microsoft and Meta will report their earnings on Wednesday, with other Big Tech companies like Alphabet and Amazon following next week.

Forecasts note Google Cloud growth picked up to about 35% in the last quarter of 2025, while Microsoft’s Azure is expected to slow slightly to 38.8%. Amazon Web Services is seen growing just over 21%, still modest by historical standards.

The concern is whether companies using this technology are actually seeing benefits. A recent PwC survey of 4,454 chief executives found that more than half reported no revenue gains or cost savings from their investments so far.

“For this not to be a bubble by definition, it requires that the benefits of this are much more evenly spread,” Microsoft chief executive Satya Nadella said at Davos.

Microsoft’s own challenges are increasing. Analysts at Morgan Stanley describe sentiment around the company as a “wall of worry,” noting stronger competition in cloud services and its reliance on OpenAI, where it holds a 27% stake. 

The company has also warned that shortages in AI capacity will last until at least June, while high memory chip prices are weighing on the wider PC market, a key part of its Windows and Xbox business. 

Revenue growth for the quarter is expected to slow to about 15.3%, the weakest in three quarters.

Alphabet, by contrast, is benefiting from tighter links between AI and its core search business, alongside a steadier advertising market. It is also opening new ground by supplying its Tensor Processing Units to Anthropic, a move worth tens of billions of dollars and a break from its long-standing policy of keeping those chips for internal use.

Stronger ad targeting and recommendations are expected to lift Meta’s revenue by more than 20%, but heavy spending on elite AI hires is set to drag profits to their lowest level in almost three years. 

Meanwhile, growth in Amazon’s North American retail arm is slowing, but AWS is showing gradual improvement, helped by renewed confidence in its AI strategy.