The market is shifting. Big-cap tech names that have dominated the markets for nearly two years are starting to slow down. Other parts of the market are starting to take over the leadership.
However, not all tech plays are big-cap names. And many tech stocks are still well off their all-time highs. Those that are heading higher now still have more room to run, and a few could even become market leaders in their own right.
That includes the payment companies, which have lagged in recent years. Payment giant PayPal (PYPL) is a case in point. The company’s branded checkout continues to hold strong, and competitors are seeing slow traction if at all.
PayPal has already rallied over 40% in the past year, with most of its strength coming recently. But shares are still inexpensive at 17 times forward earnings. Both revenues and earnings are growing at nearly 10% right now.
Action to take: Given the company’s moderate growth and reasonable valuation, investors may like shares here. The stock’s uptrend likely still has more room to run higher in the months ahead.
If PayPal continues to grow its earnings and profits, it may even become the next tech company to start paying a dividend.
For traders, the February 2025 $85 calls, last trading for about $6.05, could see mid-to-high double-digit returns on a continued rally into next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.