Klarna reported that early tests using Google Cloud’s AI resulted in a 15% increase in app usage and a 50% boost in order volumes.
Klarna (KLAR) announced on Thursday that it has partnered with Alphabet’s (GOOG/GOOGL) Google Cloud to utilize the tech giant’s artificial intelligence (AI) across its app.
Klarna’s stock rose as much as 5.5% in pre-market trade. However, retail sentiment on Stocktwits around the shares remained in ‘bearish’ territory. Meanwhile, Google’s stock edged 0.25% higher with retail sentiment improving to ‘bullish’ from ‘neutral’ territory over the past day.
The global digital bank said the partnership aims to enhance personalization and engagement for shoppers. Klarna plans to leverage Google’s AI tools and models to create dynamic digital lookbooks, hyper-targeted marketing campaigns, and improved visual content throughout its app. Early tests reportedly increased app usage by 15% and boosted order volumes by 50%. The app currently has 114 million users, according to the company.
Beyond marketing, Klarna intends to apply AI to its image library, tailoring content to individual user preferences and enhancing the overall shopping experience. The partnership will also extend to security, with AI deployed to strengthen fraud detection and anti-money laundering measures through advanced pattern analysis.
Klarna went public in September in one of the year’s largest fintech IPOs, priced at $40 per share. Wall Street remains optimistic, with Bank of America, Wolfe Research, UBS, and JPMorgan issuing bullish ratings this week, according to TheFly.
BofA initiated coverage with a $51 price target and a ‘Buy’ rating, citing Klarna’s Buy Now, Pay Later (BNPL) model and its significant total addressable market. Wolfe Research gave an ‘Outperform’ rating with a $50 target, noting the company should trade at a premium to growth fintech peers and calling its expansion initiatives “constructive.”
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