Intraday price action often doesn’t tell the entire story when it comes to specific stocks. That’s a narrative I think probably describes PayPal (NASDAQ:PYPL) stock well today. Down nearly 3% in early afternoon trading, PYPL stock appears to be seeing a consolidation move after a nice period of strong gains over the past three months.
That said, there are some bullish catalysts certain investors are watching closely. Notably, the company’s recently-announced upcoming “First Look” keynote on Jan. 25 is raising eyebrows. That’s partly due to the fact that this keynote, which promises new innovations for both PayPal and Venmo, comes a week before the company reports quarterly results. But it also reflects some intriguing comments made by the company’s CEO, Alex Chriss, who noted that the company would unveil something that would “shock the world.”
Let’s dive into what investors may want to consider when it comes to this upcoming potential catalyst.
PYPL Stock Sinks Despite Key Upcoming Catalyst
As part of PayPal’s press release on its upcoming keynote, Chriss did note that investors can expect to see innovations around “how we’re going to revolutionize commerce again through AI-driven personalization for both consumers and merchants.” This comment has led to some speculation from analysts about what exactly could be announced.
A recent note from RBC Capital analyst Daniel Perlin states that it’s the AI-driven piece that’s garnered his attention. Specifically, Perline believes that “it’s clear to us that they will showcase the key data assets the company has, starting with its 430 million active accounts, of which 35 million are merchant accounts and specifically demographically attractive users in Venmo.” Additionally, the company’s comments about utilizing AI will likely lead to some announced improvements in its ecosystem, allowing for better authorization rates for its merchants.
If the company can improve these authorization rates and potentially lower advertising costs on its platform, significant fundamental improvements could be seen in its bottom line. Everyone’s talking about AI right now, but what investors increasingly care about is how any sort of AI integration will affect the bottom line. If PayPal showcases something investors like, this could be a key catalyst to pay attention to.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
