11 Cheap NASDAQ Stocks to Buy According to Hedge Funds

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1. PayPal Holdings Inc. (NASDAQ:PYPL)

Forward P/E Ratio as of April 21: 12.2

Number of Hedge Fund Holders: 94

PayPal Holdings Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments for merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants & consumers that enables its customers to connect, transact, and send & receive payments online & in person, as well as transfer & withdraw funds using various funding sources.

In 2024, PayPal saw branded checkout transaction margin dollar growth in each quarter, with US branded checkout growth accelerating in Q4. This was due to new checkout innovations that are scaling effectively. PayPal Holdings Inc. (NASDAQ:PYPL) has upgraded its branded checkout experiences by reducing latency by more than 40% and driving more than 1% of conversion lift on average, based on early results.

These upgraded experiences are currently live for over 25% of US checkout traffic, which is an increase from 5% in the previous quarter. Beyond improved conversion rates, these new experiences enhance the visibility of PayPal’s branded marks and solutions like Buy Now, Pay Later (BNPL), which can increase share of wallet. In 2024, PayPal facilitated ~$33 billion in BNPL total payment volume, which was up 21% year-over-year.

Wedgewood Partners stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2025 investor letter:

“PayPal Holdings, Inc. (NASDAQ:PYPL) was a leading detractor from performance for portfolios during the quarter. The Company’s branded checkout grew by a healthy +6% while total payment volumes grew by +7% during the Company’s most recent quarter. PayPal also outlined several reinvestment initiatives across its platform that continue to accelerate its branded checkout volume growth back to double digits. In addition, the Company has authorized nearly $20 billion in share repurchases which represents nearly a third of its market cap as of quarter end. We continue to hold PayPal as one of our largest active weights in portfolios. “

While we acknowledge the growth potential of PayPal Holdings Inc. (NASDAQ:PYPL), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PYPL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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