The once red-hot fintech space was one of the biggest victims of the implosion in high-growth stocks this year, but a jump in payments giant PayPal Inc. on Wednesday raised hopes that perhaps the group may have hit a bottom.

The Grayscale Future of Finance ETF (GFOF) jumped 6% on Wednesday following the earnings report, while the Global X FinTech ETF (FINX) gained 5%.

GFOF invests in companies representing three sectors Grayscale considers to be the future of finance: digital asset infrastructure, technology solutions and financial foundations.

While FINX invests broadly in emerging financial tech companies that are disrupting established finance-related industries like insurance, investing, fundraising and third-party lending.

Fintech Giants Reports

This week, PayPal reported that its second-quarter revenues increased by 9% year over year to $6.8 billion, slightly ahead of the consensus Bloomberg analysts’ estimate. Still, the company projected $27.85 billion in revenues for 2022 as a whole, which would come in below what analysts’ expectations prior to the report.

Nevertheless, shares of the company surged 10% as investors cheered the fact that the results weren’t even worse. At its lowest point in July, PayPal was down more than 77% from its highs of 2021, so clearly, the stock had priced in a lot of bad news.

In addition to providing guidance on its business, PayPal confirmed that activist investor Elliott Management had taken a $2 billion stake in the company.

Jesse Cohn, a managing partner at Elliott, mentioned a “a number of steps that have been underway and are being initiated to help realize the significant value opportunity.”

Indeed, PayPal forecast that cost cuts would save it $900 million in 2022 and $1.3 billion in 2023. It also forecast it would repurchase $4 billion of stock this year.

All those measures together might help the company make a bit more money than it previously thought. PayPal raised its earnings-per-share guidance for 2022 to $3.92 which is an increase from the company’s previous 2022 guidance of $3.87, but still below $4.60 in 2021.

Fintech ETFs Jump

As one of the world’s largest fintech companies, PayPal naturally has a big weighting in ETFs that target the theme. GFOF, FINX, the Direxion Daily FinTech Bull 2X Shares (FNTC) and the ETFMG Prime Mobile Payments ETF (IPAY) each allocates more than 6% of their portfolios to the stock, according to the ETF.com stock finder tool.

These funds advanced from 3.5% to 6.5% on Wednesday as they benefited from the gains in one of their largest holdings.