Artisan Partners named PayPal as one of its biggest portfolio decliners in its first-quarter 2026 investor letter.
PayPal stock dropped by 20% or more during the quarter.
The investment firm blamed the sell-off on weak earnings reported in early February.
Artisan also cited increased uncertainty following a sudden CEO change.
Artisan's Value Fund reported that PayPal's results fell below expectations.
Consequently, PayPal lowered its earnings guidance.
The company also reduced its transaction margin guidance.
The fund highlighted performance weakness in PayPal's high-margin branded checkout business.
Macroeconomic headwinds and execution issues slowed growth in this segment.
Other Artisan funds exited their positions in PayPal during the quarter.
The Artisan Select Equity Fund was among those exiting.
These funds labeled the investment a "mistake."