Whenever a company posts prospective changes in its business, but its share price does not rise, it is a potential value trap.
PayPal (PYPL) traded in a narrow range of between $60 - $70 since March. Earlier this month, shares slipped after the company presented at the UBS Global Technology and AI conference. The firm’s CFO, Jamie Miller, warned investors that the macro pressure it experienced in September continued into October and November.
PayPal is working with AI partners, such as OpenAI, Perplexity, Google (GOOGL), and others. By using AI to help its customers complete transactions, it might reverse its weak prospects.
Investors should consider avoiding PYPL stock. Fed-up investors might dump the stock, sending shares to below $50.
In the software sector, Adobe Systems (ADBE) faces heightened risks amid the rise in AI. In the last few weeks, ADBE stock gained nearly 6%, breaking out from sub-$320 to close at $356.43 last week.
Adobe posted strong fiscal Q4 results and issued guidance for FY 2026. The firm is growing its importance in the global AI ecosystem. As adoption of its AI-driven tools increases, Adobe might compete effectively against Alphabet’s Nano Banana AI image creator.
Keep watching out for AI-native competitors building 3D object generation, video creation, and story-to-video pipelines. That would pressure Adobe’s video and image editing subscription services.
