Booking Holdings: AI Fears Overblown, Analyst Says

Morgan Stanley views immediate concerns regarding artificial intelligence's impact on Booking Holdings as premature. The bank has upgraded the travel technology company's rating to overweight from equal weight. Analyst Brian Nowak adjusted his price target to $5,500 from $6,150, a forecast that still indicates a potential 42% increase in share value.

Booking's shares have experienced a significant decline over the past year. However, Nowak is less concerned about artificial intelligence posing a threat than recent market reactions suggest. He anticipates Booking will continue to dominate as a key driver in the travel industry, even as agentic AI tools develop.

Booking is expected to retain customer ownership and utilize traveler data to bolster its high-margin direct business. Its substantial inventory also gives it leverage over travel agents. While generative AI will spawn new products, early agentic travel products appear to be directing users to online travel agencies like Booking for purchases.

These platforms will continue to capture consumer browsing and purchase data, which is crucial for their long-term business. The structure of the online travel industry is likely to remain more closely aligned with paid search than currently understood. Booking's history of strong execution suggests it will maintain its leadership in this evolving landscape.