PayPal Stock Surges on Earnings Boost and OpenAI Partnership
PayPal Holdings (PYPL) has recently reported impressive financial results for the third quarter of 2023, surpassing Wall Street expectations. Alongside the quarterly earnings, the company has unveiled a strategic partnership with OpenAI aimed at enhancing e-commerce.
Q3 Earnings Overview
PayPal’s earnings per share (EPS) for Q3 rose 12%, reaching $1.34 on an adjusted basis. Revenue increased by 7%, totaling $8.42 billion. Analysts had anticipated earnings of $1.20 per share alongside revenue of $8.236 billion.
Venmo and Total Payment Volume Growth
- Venmo’s revenue grew by 20% in Q3.
- Total payment volume processed from merchant customers rose 8% to $458 billion, surpassing estimates of $447.5 billion.
- Branded checkout growth remained steady at 5%, aligning with expectations.
Partnership with OpenAI
In a significant move, PayPal has partnered with OpenAI, the company behind ChatGPT. This collaboration will allow users of ChatGPT to complete purchases instantly through a PayPal wallet. Currently, ChatGPT boasts over 800 million weekly users.
Previously, PayPal established a similar partnership with Google. However, concerns remain about maintaining market share in e-commerce, especially with increasing competition from Apple.
Analysts’ Insights
Analyst Matthew Coad from Truist Securities cautioned that while the partnership may boost e-commerce, it might not effectively address PayPal’s ongoing market share challenges.
Stock Performance and Forecast
PayPal’s stock surged nearly 16% to $81.18 following the earnings report, marking its highest level since February. Despite this, shares had previously declined 17% in 2025. Analysts forecasted adjusted EPS for the current quarter, ending December, to be between $1.27 and $1.31, slightly below some expectations.
Active Users and Stock Buybacks
In Q3, PayPal reported a 1% increase in active accounts, bringing the total to 438 million. The company also repurchased $1.5 billion of its stock during the quarter.
Future Outlook
Despite challenges, PayPal continues to adapt, transitioning from a simple checkout solution to a comprehensive mobile shopping and payments app. However, it currently holds a composite rating of 46 out of a possible 99 based on its performance compared to other growth stocks.
With the recent positive earnings and the innovative partnership with OpenAI, PayPal is positioned for potential growth in the fast-evolving e-commerce landscape.
