How Deeper AI Integration and New Partnerships at PayPal (PYPL) Have Changed Its Investment Story

• PayPal recently introduced advanced AI-powered shopping features for its Honey platform and entered a two-year, US$7 billion buy now, pay later partnership with Blue Owl Capital, while also forming a major payment collaboration with Google to enhance AI commerce experiences.
• These initiatives mark PayPal’s shift from a payments provider to an AI-integrated commerce platform, aiming to close the conversion gap in AI-driven e-commerce while increasing consumer and merchant engagement.
• We will now assess how PayPal’s deeper AI integration and partnerships may influence its evolving investment thesis.

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PayPal Holdings Investment Narrative Recap

To be a PayPal shareholder today, you need to believe in the company’s shift from pure payments to an AI-integrated commerce platform, capitalizing on new tech and partnerships to boost conversion and engagement. The latest news around enhanced AI shopping features and expansive partnerships is significant, but increased competition, particularly from Stripe, remains the most important short-term risk, while brand engagement is the key catalyst. As the impact on branded payments volume isn’t yet material, the core investment thesis stands with some caution.

The recent collaboration with Google, embedding PayPal deeply into Google’s platforms and AI shopping experiences, is the most relevant announcement. This moves PayPal further into the heart of digital commerce, potentially deepening merchant relationships and boosting branded conversion, an important catalyst for revenue and earnings growth in the company’s evolving model.

Yet, against these positive developments, investors should also be aware that competitive pressure from rivals entering the AI payments space is...

Read the full narrative on PayPal Holdings (it's free!)

PayPal Holdings' outlook anticipates $38.1 billion in revenue and $5.4 billion in earnings by 2028. This scenario assumes a 5.6% annual revenue growth rate and a $0.7 billion increase in earnings from the current $4.7 billion.

Uncover how PayPal Holdings' forecasts yield a $82.52 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Sixty-one community fair value estimates for PayPal span from US$74.16 to US$189.96, reflecting a wide range of views from the Simply Wall St Community. As many weigh up the impact of intensifying competition on PayPal’s future growth, you can explore how others are interpreting these risks and opportunities.

Explore 61 other fair value estimates on PayPal Holdings - why the stock might be worth just $74.16!

Build Your Own PayPal Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your PayPal Holdings research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free PayPal Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate PayPal Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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