Analysts Sceptical About PayPal Stock’s Pact With Google

PayPal (PYPL) stock experienced a modest boost following the announcement of a multi-year strategic partnership with Google, yet analyst sentiment remains cautious about its near-term financial impact. The collaboration focuses on integrating PayPal's commerce solutions with Google's AI capabilities, but experts suggest that tangible benefits may take time to materialize.

PayPal (PYPL) Price Targets

Following the September 17, 2025, announcement, PayPal's shares initially rose by over 3%. The partnership aims to integrate PayPal's branded checkout, Hyperwallet, and Payouts into Google products, while also positioning PayPal as a key payment processor for Google Cloud and Google Play. Google's emphasis on leveraging its advanced AI to enhance PayPal's services and security underscores the strategic importance of the alliance.

Despite the initial market enthusiasm, analysts at Morgan Stanley maintain an “Equal Weight” rating on PayPal, setting a price target of $75. Their analysis suggests that while the partnership could bolster PayPal's medium-term objectives, the short-term economic benefits are expected to be gradual and limited. The integration of PayPal's branded checkout is unlikely to significantly impact growth in the immediate future, with minimal contribution to PayPal's profit and loss statement anticipated in the near term.

Broader analyst sentiment towards the payments firm reflects a mixed outlook. The consensus rating stands at “Buy,” with an average price target of $83.89, indicating a potential upside of approximately 22.9% from current levels. Earlier in the year, Wells Fargo & Company upgraded PayPal's stock, raising the price target from $75.00 to $80.00 while maintaining an “Equal Weight” rating, signaling cautious optimism.

PayPal's recent financial performance has shown resilience. In April 2025, the company exceeded Wall Street's profit expectations for Q1, reporting earnings of $1.33 per share versus an anticipated $1.16. CEO Alex Chriss's focus on high-margin operations and cost reduction has contributed to the company's profitable growth. PayPal has maintained its full-year adjusted profit forecast between $4.95 and $5.10 per share, taking into account macroeconomic uncertainties. By July 2025, PayPal raised its full-year profit forecast above Wall Street estimates, projecting an adjusted annual profit of $5.15 to $5.30 per share, driven by growth in high-margin segments like Venmo.

The introduction of Google's Agent Payments Protocol (AP2), designed to enhance trust in AI agents for e-commerce, further highlights the industry's move towards AI-driven commerce. PayPal is among the 60 partners supporting this initiative, indicating a collaborative effort to establish a reliable AI-commerce infrastructure. PayPal also partnered with Perplexity AI to integrate payment capabilities directly within its chat interface, enabling users to make instant purchases while interacting with Perplexity Pro.

PayPal Analyst Summary

Bull Case

The market's reaction to the Google partnership, while positive initially, has been tempered by analyst caution regarding its immediate financial impact. While PayPal's strategic initiatives demonstrate a commitment to leveraging AI and partnerships for growth, the path to realizing substantial economic benefits appears to be gradual, potentially influencing future sentiment.