What Happened?
Shares of digital payments platform PayPal (NASDAQ: PYPL) jumped 4.5% in the morning session after the company launched PayPal Ads Manager, a new service designed to help tens of millions of small businesses create their own advertising networks.
This new tool let small businesses use their store traffic to generate revenue from ads with no upfront costs. The platform planned to use PayPal's extensive payment data to help create new ad spaces for brands. The service was set to be available in the United States in early 2026, with plans to expand to the United Kingdom and Germany later. The news was met with optimism, as some analysts had previously pointed to PayPal's advertising business as a promising source of future revenue. Adding to the positive sentiment, the company also revealed a partnership with India's national payments system, UPI, to make international payments easier for users.
After the initial pop the shares cooled down to $73.88, up 3.6% from previous close.
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What Is The Market Telling Us
PayPal’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3.8% on the news that OpenAI unveiled a financial offering powered by Stripe, a key competitor, adding to a series of negative developments for the company in Europe. OpenAI's new offering allowed users to buy physical goods, a move that increased competitive pressure on PayPal in the AI space. This development followed a day after PayPal's stock had its best session in over a month.
PayPal is down 14.3% since the beginning of the year, and at $73.88 per share, it is trading 19.5% below its 52-week high of $91.81 from January 2025. Investors who bought $1,000 worth of PayPal’s shares 5 years ago would now be looking at an investment worth $379.61.
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