Shares surge after PayPal signs deal with OpenAI to become the first ChatGPT wallet
PayPal shares have surged after they signed a groundbreaking deal with ChatGPT this week.
Tuesday (October 28) proved to be a landmark day for major tech announcements. First, Nvidia revealed a series of deals that will transform the US energy sector and lay the groundwork for 6G infrastructure. Now, PayPal has skyrocketed in the stock market.
The payment giant announced a groundbreaking partnership with OpenAI that will allow ChatGPT's 800 million weekly users to purchase products directly through the AI platform using PayPal. As a result of the partnership, PayPal's stock has soared 10%.
Advert
PayPal also raised its annual profit forecast for the second time and declared its first-ever dividend in the company's 27-year history.
The partnership will connect PayPal's global merchant network directly to ChatGPT, enabling businesses to sell products and services within the massively popular AI chatbot.
AI shopping tools are transforming how people buy things online. Rather than searching websites, manually comparing products and checking reviews across multiple platforms, consumers could simply tell ChatGPT what they need and let the AI handle the rest.
“It’s a whole new paradigm for shopping,” CEO Alex Chriss explained during a call with analysts. It’s hard to imagine that agentic commerce isn’t going to be a big part of the future.”
Analysts at Evercore ISI said: "Agentic commerce is seen by some as a potential 'silver bullet' to leverage PayPal's large and global user base and reignite growth on what could be (to be proven as it's still very early days) a next-gen commerce platform."
PayPal's integration positions the company at the intersection of two massive trends, which are AI adoption and digital payments.
"We want PayPal to be available anywhere and everywhere that consumers want to pay and we want merchants to be able to sell to consumers anywhere and everywhere," Chriss announced.
The company now expects full-year adjusted earnings per share of $5.35 to $5.39, up from its previous guidance of $5.15 to $5.30.
PayPal's board approved a quarterly dividend of 14 cents per share, representing a targeted payout of 10% of adjusted profit.
"We've moved this business from defence to offence and from stabilisation to acceleration," Chriss added.
The CEO has systematically overhauled the business in recent years, shifting focus from chasing revenue growth at any cost to prioritising profitability and sustainable expansion.
“We’ve got hundreds of millions of loyal PayPal wallet holders who now will be able to click the ‘Buy with PayPal button’ on ChatGPT and have a safe and secure checkout experience,” Chriss added.