PayPal’s Google Alliance Ignites Bullish Stock Forecast - Here’s Why
PayPal just dropped a bombshell partnership with Google that could send its stock soaring.
The Digital Payments Revolution
This isn't just another corporate handshake - it's a strategic masterstroke that positions PayPal at the forefront of the digital payments arms race. By integrating with Google's ecosystem, PayPal gains instant access to millions of potential users who prefer seamless, secure transactions.
Market Momentum Building
Traditional finance analysts are scrambling to update their models while crypto natives nod knowingly - this is exactly the kind of real-world adoption that drives sustainable growth. The partnership demonstrates PayPal's commitment to staying ahead in the rapidly evolving fintech landscape.
Wall Street's Wake-Up Call
While legacy institutions debate whether this move justifies a price target increase, those who understand digital asset infrastructure recognize the bigger picture. This collaboration represents another nail in the coffin of outdated payment systems - though Wall Street will probably still find a way to charge commission on analyzing it.
The timing couldn't be better as digital payment volume continues its explosive growth trajectory. PayPal's strategic positioning suggests this partnership could be the catalyst that propels the stock to new heights.
Image source: Getty Images.
In the past, CEO Alex Chriss has talked about not chasing low gross margin volume for the sake of revenue growth. Now, the economics of payment processing for a client as large as Google isn't going to be robust, but the sheer size of that volume and the technological partnership more than make this deal worthwhile. Meanwhile, moving more of PayPal's workload to Google Cloud should help it launch new features faster.
Why the stock is a buy
While there is still plenty of heavy lifting for PayPal to do, this deal should help the company achieve its goal of accelerating its branded checkout growth from the mid-single digits to between 8% to 10% by 2027, as its branded checkout is expanded to key Google properties.
Investors also should not underestimate the strategic importance of the partnership. For years, PayPal has faced criticism that it was stuck as just a digital wallet with little differentiation. Now it is embedding itself in one of the most influential tech ecosystems while also collaborating on the very protocols that will shape how AI shopping agents transact. That's a very different positioning than being yet another online checkout button.
It's also worth noting that PayPal continues to execute on other fronts. Venmo revenue grew more than 20% last quarter, and Pay with Venmo transactions were up 45%. Physical debit and credit cards are also gaining traction, with 2 million first-time PayPal and Venmo debit card users added in the U.S. in Q2. Transaction volume from those offline channels ROSE 8%. These aren't headline-grabbing innovations, but they show the company is broadening its user base and strengthening ties with consumers.
The stock has been a laggard, down roughly 20% year to date, even after posting strong earnings last quarter and raising its full-year EPS outlook. That has left PayPal at an attractive valuation, trading at a forward price-to-earnings ratio (P/E) of about 11.5 times 2026 analyst estimates.
There is a risk that the market won't immediately reward the partnership, since most of the financial benefit will take time to materialize, but for investors willing to be patient, this looks like the kind of strategic MOVE that can reinvigorate growth and help close the gap between PayPal's valuation and its potential. AI-driven commerce is still in its early innings, and PayPal is now much better positioned than it was just a couple of months ago.
