Airbnb, Inc. (ABNB): A Bull Case Theory

We came across a bullish thesis on Airbnb, Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on ABNB. Airbnb, Inc.'s share was trading at $120.03 as of August 7^th. ABNB’s trailing and forward P/E were 29.13 and 27.62, respectively according to Yahoo Finance.

Airbnb delivered a strong Q2 2025 performance, with revenue rising 12.7% year-over-year to $3.1 billion, beating estimates by 2.5%. Adjusted EBITDA reached $1.04 billion with a 33.7% margin, while net income hit $642 million and EPS of $1.03 exceeded expectations by 12%. The business remains highly profitable, underpinned by a 20.7% net margin and robust average daily rates of $174.50. Free cash flow stood at $1 billion for the quarter and $4.3 billion over the trailing 12 months, despite a 6.9pp YoY decline in FCF margin.

Nights and Experiences booked grew 7.4% YoY to 134 million, with strong demand in APAC and Latin America offsetting slower growth in the U.S. Airbnb continues to expand globally, with emerging markets growing twice as fast as core regions. Strategic initiatives such as the cohosting model, flexible payments in Brazil, and a redesigned app interface improved engagement and conversion. The relaunch of Experiences and introduction of Services added new monetization layers, with high guest satisfaction but limited near-term revenue contribution.

AI integration reduced human support needs by 15%, and future plans include embedding AI in travel planning and search. The platform’s ability to cross-sell homes, services, and experiences gives it an edge over search-dependent OTAs. A $1 billion share buyback was completed in Q2, followed by a new $6 billion authorization, reflecting confidence in long-term free cash flow. While U.S. and EMEA growth is moderating and Q4 presents tough comps, management remains focused on scaling new verticals, optimizing supply, and sustaining margin strength.

Previously, we covered a bullish thesis on Airbnb, Inc. by Chit Chat Stocks in May 2025, which highlighted the company’s expansion into Experiences and Services. The company’s stock price has declined approximately 12% since our coverage as monetization is still early. Sergey shares an identical thesis but emphasizes Airbnb’s strong Q2 results and initial traction across new verticals.

Airbnb, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held ABNB at the end of the first quarter which was 54 in the previous quarter. While we acknowledge the potential of ABNB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None.