PayPal Partners with OpenAI and Reports Strong Earnings: What Investors Should Watch Next
October 28, 11:13 am
PayPal (PYPL) has entered a new era. The fintech giant just announced a major partnership with OpenAI, positioning itself at the forefront of AI-driven commerce. The news comes as PayPal delivers a solid third-quarter earnings report, reinforcing confidence in its long-term growth strategy. For investors, this mix of innovation and steady financial performance signals both a lot potential and the stock price jumped today before cooling of in the afternoon. Let's take a closer look at the latest announcement and data.
A New Partnership with OpenAI
In one of the most significant fintech announcements of the year, PayPal revealed that its digital wallet will be embedded into ChatGPT, enabling users to make purchases directly through OpenAI’s platform. The integration will let ChatGPT’s massive user base - over 700 million weekly users - shop for products and complete transactions seamlessly using PayPal.
According to PayPal CEO Alex Chriss, the move allows users to “click the ‘Buy with PayPal’ button on ChatGPT and have a safe and secure checkout experience.” Merchants that already use PayPal will also benefit, with their inventory automatically discoverable and purchasable through ChatGPT’s AI shopping interface.
This is part of OpenAI’s broader push into e-commerce, following partnerships with Shopify, Etsy, and Walmart. Chriss described it as “a whole new paradigm for shopping,” emphasizing that agentic commerce - AI tools that act as personal shopping agents - will likely play a major role in how consumers interact with products online.
Beyond its consumer-facing implications, PayPal will also handle merchant routing, payment validation, and other behind-the-scenes processes for transactions conducted via ChatGPT. This simplifies integration for merchants, while leveraging PayPal’s existing network of verified users and sellers to reduce fraud risk.
To strengthen internal operations, PayPal is also expanding its use of OpenAI’s enterprise AI products, allowing employees to speed up product cycles and enhance decision-making with generative AI tools.
The market responded immediately. Shares of PayPal surged as much as 13% following the announcement - a clear indication that investors see this partnership as a meaningful growth catalyst.
A Solid Quarter for PayPal
The AI partnership coincides with a strong third-quarter earnings report. PayPal posted $8.4 billion in revenue, up 7% year over year, and transaction margin dollars climbed 6% to $3.9 billion. The company’s GAAP earnings per share rose 32% to $1.30, showcasing solid operational leverage.
Perhaps the most notable milestone: PayPal announced its first-ever quarterly dividend, set at $0.14 per share, signaling growing financial maturity and confidence in its cash flows.
Management also raised full-year guidance and expects 6–7% transaction margin dollar growth in 2025, excluding interest on customer balances. These numbers reflect not just stability but momentum, particularly as PayPal expands its ecosystem and explores high-margin AI-driven commerce.
Alternative Data Insights: Mixed but Encouraging Signals
Alternative data paints a nuanced picture of PayPal’s current health and outlook.
Web Traffic: PayPal’s website attracts an estimated 600 million monthly visitors, representing a 5% increase year over year. This steady growth reflects sustained interest and user engagement, a positive sign for a mature platform in a competitive digital payments market.
Hiring and Workforce Growth: The company currently has around 1,000 open job postings, suggesting steady hiring levels. LinkedIn data shows PayPal’s employee base has grown by 13% year over year, which is typically a strong signal of business expansion and product development activity.
Employee Sentiment: However, internal sentiment appears to be weakening. Only 49% of employees express a positive outlook for the company’s future, a decline of 10% over the past two years. This softening morale may indicate internal friction or uncertainty amid ongoing transformation and leadership changes.
Social Media Performance: PayPal’s social media engagement presents a mixed picture. Instagram followers (684k) have remained largely flat, as have Threads and X (formerly Twitter). The exception is TikTok, where PayPal’s followers doubled over the past year, showing strength in reaching younger audiences and potential new users.
The Stock and Valuation
At the time of writing, PayPal’s stock trades at $76 per share, giving it a market capitalization of about $72.6 billion. Despite recent momentum, shares remain down roughly 9% year over year, reflecting broader concerns around competition, consumer spending, and profit margins.
Still, the stock’s valuation looks reasonable compared to its earnings trajectory and growth opportunities in AI and digital commerce. If the OpenAI integration delivers meaningful transaction volume and engagement, investors could see this as the beginning of a new growth phase.
What Investors Should Watch Next
- AI-Driven Commerce Adoption: The success of PayPal’s integration with ChatGPT will depend on how quickly users embrace agentic commerce. Watch for early adoption metrics, Google search trends, transaction volume through ChatGPT, and new merchant integrations.
- Revenue Growth Beyond Payments: PayPal’s next growth chapter may come from becoming the “payment backbone” for AI-driven transactions, not just traditional e-commerce. Continued partnerships with AI platforms like Google and Perplexity reinforce this direction.
- Stock Momentum and Dividend Impact: The new dividend policy may attract a new class of long-term investors, potentially stabilizing share volatility. Look for changes in sentiment, and mentions for PYPL on Reddit and X.
The initial data shows that sentiment around PayPal’s partnership with OpenAI appears strong. Mentions of the stock on Reddit have spiked this morning, and our members received a timely Reddit stock alert highlighting the excitement along with some nuanced reactions from retail investors to the news.
Bottom Line
PayPal is positioning itself as more than a digital wallet - it’s aiming to be the infrastructure that powers the future of AI commerce. The company’s strong earnings, forward-looking partnerships, and stable alternative data trends make it a compelling stock to watch.
While challenges remain, particularly around employee sentiment and social growth, PayPal’s deep merchant network and integration into OpenAI’s ChatGPT platform could redefine how consumers shop online. For investors, this might be the early stages of PayPal’s resurgence in the AI economy.
Disclaimer: The information provided is for educational and informational purposes only and should not be construed as financial or investment advice. All investments involve risk, and you should conduct your own research or consult a qualified professional before making any investment decisions.
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