Yelp Stock Climbs 3 Percent as AI Partnerships With OpenAI Help Offset Local Advertising Weakness

Shares of Yelp Inc. rose more than 3% Friday, continuing a choppy but closely watched stretch for the local-review platform as investors weigh the company's push into artificial intelligence licensing deals against persistent weakness in its core advertising business.

Yelp stock traded at 23.19 dollars, up 0.68 dollars, or 3.02%, as of 12:34 p.m. Eastern time on the New York Stock Exchange. The gain comes amid a volatile month for the stock, which has fallen roughly 11.7% over the past month and about 28.5% over the past year, according to trading data, even as the company has pointed to its expanding artificial intelligence initiatives as a source of long-term growth.

Much of the recent attention on Yelp has centered on the company's data-licensing partnership with OpenAI, announced in late July. Under the agreement, OpenAI's ChatGPT chatbot can surface Yelp's reviews, ratings, photos and business details when responding to local search queries, with Yelp's branding and links appearing alongside that content. The deal also includes plans to integrate Yelp's "Request a Quote" feature, allowing ChatGPT users to contact local service providers directly through the chatbot without leaving the interface. Yelp and OpenAI did not disclose the financial terms of the arrangement, which is non-exclusive, leaving Yelp free to pursue similar deals with other artificial intelligence companies.

Yelp Chief Executive Officer Jeremy Stoppelman, who co-founded the company in 2004, has framed the OpenAI partnership as validation of the value of Yelp's decades of user-generated review data at a moment when consumers are increasingly turning to AI chatbots instead of traditional search engines. "If you want to answer local queries, you really need Yelp," Stoppelman told Axios when the deal was announced. He added that distributing Yelp's content beyond its own platform can still benefit the company directly, saying, "Ultimately, we believe that if we allow our content outside the walls of just Yelp, and we provide it in useful ways to consumers ... value does accrue back to Yelp."

The OpenAI deal followed Yelp's existing data-licensing relationships with companies including Apple Maps and Amazon's Alexa, and it has become a central talking point in the company's broader narrative about adapting to an AI-driven search landscape. On Yelp's second-quarter earnings call earlier this month, Stoppelman described the ChatGPT integration as still in its early stages. "It's still kind of the first inning, but you can see ratings, it links back to Yelp. You can see review snippets, and those also can link back to Yelp," he told analysts, adding that the company had also begun rolling out its Request-a-Quote feature within the chatbot.

Yelp's second-quarter results, reported Aug. 6, showed the tension between the company's AI ambitions and ongoing pressure on its core advertising business. Net revenue rose about 1.4% year-over-year to 375.5 million dollars, exceeding the high end of the company's own guidance range by 8 million dollars. Earnings per share came in at 57 cents, sharply above analyst expectations and a 56% earnings surprise, according to trading data compiled by market trackers. However, net income declined 28% from a year earlier to roughly 32 million dollars, as the company increased spending on product development and its AI initiatives.

The company's advertising business, historically its primary revenue driver, showed mixed trends. Services advertising revenue, which covers categories such as home repair and professional services, was flat year-over-year at 241 million dollars, while restaurant, retail and other advertising revenue declined 10% to 102 million dollars. Yelp's newer, AI-oriented revenue streams grew far more quickly by comparison: the company's "other revenue" category, which includes data licensing, nearly doubled year-over-year to a record 33 million dollars in the quarter.

"At the same time, our trusted content is powering local discovery for ChatGPT and other AI partners," Stoppelman said in the company's earnings statement. "While headwinds for local businesses persist, I'm confident we are building a stronger Yelp, transformed with AI, that is well-positioned to drive long-term profitable growth."

Yelp Chief Financial Officer David Schwarzbach highlighted the same trend in the earnings release, noting that the quarter's revenue outperformance was driven in part by that acceleration. "In the second quarter, Yelp delivered net revenue of 376 million dollars, 8 million dollars above the high end of our outlook range. Other revenue accelerated from the first quarter, increasing 98% year over year to a record 33 million dollars," Schwarzbach said.

Looking ahead, Yelp narrowed its full-year 2026 revenue guidance to a range of 1.46 billion dollars to 1.47 billion dollars and projected third-quarter revenue of 365 million dollars to 370 million dollars. The company also said it has paused its share repurchase program to prioritize paying down its revolving credit facility, with plans to resume buybacks in 2027. Yelp had roughly 339 million dollars remaining under its existing repurchase authorization as of the most recent quarter.

Wall Street's reaction to Yelp's recent results and AI strategy has been mixed. Several analysts have lowered their price targets on the stock in recent weeks even while maintaining favorable ratings, citing softer 2026 guidance, macroeconomic pressure on advertising budgets, and execution risk tied to the company's newer revenue initiatives. Baird lowered its price target on Yelp to 27 dollars from 28 dollars earlier this month, while other firms, including Craig-Hallum, have maintained buy ratings on the stock.