Why PayPal stock is surging today

Core Insights - PayPal shares surged over 10% in premarket trading after reporting stronger-than-expected third-quarter results and announcing a strategic partnership with OpenAI [1][4] - The company reported adjusted earnings of $1.34 per share, a 12% increase year-over-year, and revenue of $8.42 billion, a 7% increase, both surpassing analyst expectations [3][4] - PayPal announced its first-ever shareholder dividend with a target payout ratio of 10% of adjusted net income [4] Financial Performance - Adjusted earnings for the September quarter were $1.34 per share, exceeding Wall Street's estimate of $1.20 [3] - Revenue rose to $8.42 billion, surpassing analyst forecasts of $8.24 billion [3] - Venmo, PayPal's peer-to-peer payment platform, achieved a 20% revenue growth [3] Strategic Developments - PayPal formed a major e-commerce partnership with OpenAI, allowing over 800 million weekly ChatGPT users to make purchases using PayPal's digital wallet [4] - This partnership aims to position PayPal within the emerging "agentic commerce" ecosystem, where AI-powered assistants facilitate direct transactions [4] Market Outlook - Wall Street analysts maintain a cautious outlook on PayPal, with most holding a 'Hold' rating despite moderate upside expectations over the next 12 months [5] - The average price target for PayPal's stock is $80.60, indicating a potential upside of 14.73%, with forecasts ranging from $62 to $105 [6][8] - Among analysts, 10 have issued a Buy rating, 15 recommend holding, and 3 suggest selling the stock [8]