MSFT, PYPL Face Pressure Despite S&P 500 Rally

S&P 500 hits records, but AI upheaval pressures PayPal and Microsoft stocks despite 2026 rebound hopes.

  • The S&P 500 has hit record highs amid a disruptive AI-driven market surge.
  • Paypal (PYPL) and Microsoft (MSFT) stocks are under pressure despite the broader market rally.
  • Analyst price targets suggest potential rebounds for both stocks in 2026.

The US stock market is experiencing its most prosperous phase, with the S&P 500 reaching record highs, yet significant headwinds are battering PayPal and Microsoft shares as AI transforms the investment landscape.

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PayPal stock plunged 20% following CEO Alex Chriss’s exit, raising investor uncertainty about its future strategic direction.

The company has appointed HP’s Enrique Lore as its new president and CEO. “The big question is whether he will bring in a formidable payments team to attempt yet another multi-year turnaround or look to start reviewing options for strategic assets”, analysts at Evercore ISI said.

Meanwhile, Microsoft shares fell 10% despite a strong earnings report, as Azure’s growth slightly missed elevated investor expectations. Higher-margin, first-party offerings like Co-Pilot and AI research are now absorbing some of the cloud capacity, limiting Azure’s direct acceleration.

Consequently, analyst projections for 2026 provide a glimmer of hope for both firms. Per TipRanks, the average price target for PayPal is $62.22, representing a potential 49.20% increase from its current price.

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The highest analyst forecast sees PYPL reaching $100 in the next twelve months. Similarly, TipRanks later shared an analysis for Microsoft (MSFT) stock, with an average target of $603.47 and a high target of $678.

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