PayPal is making headlines again—this time not just for its earnings, but for a bold pivot into AI-driven commerce and digital advertising. After a rocky year for the stock, the payments giant is betting big on innovation to win back investors and outpace rivals like Visa and Mastercard.
PayPal’s Stock: Still in the Red, But Showing Signs of Life
Let’s start with the numbers.
PayPal’s stock (NASDAQ: PYPL) has dropped 18.2% year-to-date, underperforming both the S&P 500 (up
16.7%) and competitors like Visa (+
10%) and Mastercard (+
9%). The stock opened at
$70.25 on Tuesday, with a 52-week low of
$55.85 and a high of
$93.66. Its market cap sits around
$67 billion, and it’s trading at a price-to-earnings (P/E) ratio of about 15—much lower than Visa (26x) or Mastercard (31x).
Despite the slump, some analysts see value:
PayPal’s valuation is considered “cheap” compared to peers, with a Value Score of A and a forward P/E of just 12.25x. Technical indicators are even flashing a “Strong Buy” signal, according to some trading platforms.
Q3 Earnings: Revenue Up, Guidance Raised
On October 28, PayPal reported its third-quarter 2025 results.
Earnings per share (EPS) came in at $1.20, beating analyst estimates by $0.13. Revenue grew
7.3% year-over-year, and the company raised its Q4 guidance to
$1.27–
$1.31 EPS, with full-year guidance now at
$5.35–
$5.39 EPS. Return on equity remains robust at
25.35%, and net margin is a healthy
14.49%.
Strategic Shift: From Payments to “Agentic Commerce” and Ads
Here’s where things get interesting. PayPal isn’t just tweaking its business—it’s
transforming from a payment processor to a holistic commerce partner. The company just launched “Agentic Commerce Services,” a suite of AI-driven shopping tools designed to connect consumers and merchants more deeply. This move aims to streamline the user experience and expand PayPal’s reach in global markets.
But the real shocker?
PayPal is entering the digital advertising business. The company announced plans to launch an ad platform, aiming to diversify revenue and tap into the lucrative ad market. The news sent the stock surging nearly 5% in a single day, signaling that investors are excited about the potential for new growth.
What’s Next: Can PayPal Regain Its Mojo?
PayPal’s new strategy is ambitious—and risky. The company faces stiff competition from established players and upstarts alike. But by leveraging AI and branching into advertising, PayPal hopes to create new revenue streams and deepen its relationships with both merchants and consumers.
Key takeaways for investors:- PayPal stock is down for the year but may be undervalued compared to peers.
- Q3 earnings beat expectations, and guidance is strong.
- The company is betting on AI-driven commerce and digital ads to fuel future growth.
- Wall Street is watching closely—if these bets pay off, PayPal could stage a comeback.
As always, investors should keep an eye on execution. If PayPal can deliver on its promises, the next chapter could be a lot more exciting than the last.
Sources
1. News - PayPal Holdings, Inc.
2. PayPal Q3 Earnings Preview: Should You Buy the Stock Now or Wait?
3. PayPal (NASDAQ:PYPL) Releases Quarterly Earnings Results ...
4. PayPal Holdings, Inc. $PYPL Holdings Boosted by Wesleyan ...
5. PayPal Holdings Inc Stock Price Today | NASDAQ: PYPL Live
6. PayPal Stock Surges Almost 5% As It Unveils New Ad Business
