Shares of the American company PayPal rose
Shares of US company PayPal rose 14.1% to $80.15 in pre-market trading on Tuesday, after the company announced it had signed an agreement with OpenAI to integrate its digital payments wallet into the ChatGBT platform.
PayPal said the partnership gives it access to millions of users of its AI platform, who will be able to complete payments instantly and securely directly from within ChatGBT.
Under the agreement, approximately 24,000 PayPal employees will also gain access to the enterprise version of ChatGBT, with the aim of improving efficiency and accelerating business performance.
Despite the significant rise in early trading, market data indicates that PayPal shares are still down 17.7% since the beginning of the year, while the benchmark Standard & Poor's 500 index has risen 16.9% over the same period.
PayPal shares gain $5 billion in one day
What’s happening:-
Shares of PayPal Holdings rose sharply on Tuesday, after the company released its third-quarter results.
What happened:-
The digital payments firm posted better-than-expected sales and earnings for the latest quarter.
PayPal announced a collaboration with OpenAI, raised its guidance and initiated a dividend plan.
How were the results:-
The San Jose, California-based company reported single-digit sales growth for the third quarter.
Revenues rose 7% year-over-year to $8.42 billion, exceeding consensus estimates of $8.23 billion.
Adjusted earnings came in at $1.34 per share, topping Wall Street expectations of $1.20 per share.
PayPal shares rose
Why it matters:-
With consumers becoming more selective in making purchases, PayPal saw a slight decline in payments activity during September and October across the US and Europe.
Although PayPal’s total payment volumes jumped 8% year-over-year to $458.1 billion in the third quarter, transactions fell by 5%.
On a trailing 12-month basis, the number of payment transactions per active account fell by 6%. The total number of active accounts rose by 1% to reach 438 million.
PayPal’s board approved a quarterly cash dividend program, with an initial dividend of 14 cents per share, with the payout representing around 10% of the company’s adjusted net income.
PayPal announced an ecommerce deal with ChatGPT-maker OpenAI. Under the partnership, ChatGPT users would be able to complete instant checkouts using a PayPal wallet. ChatGPT has over 800 million weekly users. PayPal had announced a similar agreement recently with Google.
“With hundreds of millions of users on both platforms, this is about making commerce inside AI chat feel seamless,” CEO Alex Chriss said.
PayPal guided to adjusted earnings of $1.27-$1.31 per share for the fourth quarter. For the full year, the company raised its adjusted earnings projection to $5.35-$5.39 per share, from its previous outlook of $5.15-$5.30 per share.
PayPal
How shares responded:-
PayPal’s shares jumped 4% to close at $73.02 on Tuesday following the release of quarterly results. The stock has added around 5% over the past month.
What to watch:-
Concerns over the soft US jobs market and slower-than-expected interest rate cuts by the US Federal Reserve have weighed on consumer spending. Investors will watch the yearend holiday season, which is generally beneficial for payment firms.
PayPal shares gain $5 billion in one day
