Why Airbnb (ABNB) Stock Is Trading Up Today

What Happened?

Shares of online accommodations platform Airbnb (NASDAQ:ABNB) jumped 3.1% in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. 

New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The shares closed the day at $114.24, up 2.4% from previous close.

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What Is The Market Telling Us

Airbnb’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock gained 15.9% on the news that the company reported strong fourth-quarter results: The top line was strong, with gross booking value, nights & experiences booked, and revenue all accelerating in growth from last quarter. 

Airbnb also blew past analysts' EBITDA expectations this quarter, showing that the growth is profitable as well. While revenue guidance for the next quarter missed, adjusted EBITDA margin guidance for the full year came in ahead. 

Overall, this quarter had some key positives. Following the results, Baird upgraded the stock's rating from Neutral to Buy, adding "Upgrading Airbnb to Outperform, following a strong finish to 2024, with Q1 likely the low-water mark for growth and margins in 2025, and significant platform expansion planned for later this year." 

Goldman Sachs also raised its rating from Sell to Neutral, noting, "As framed by management, the forward growth and margin trajectory of new investment initiatives will still need additional time to gain visibility, but we see a much lower probability (absent a change in macroeconomic environment that is less about ABNB fundamentals) of an estimate revision cycle that would cause the shares to underperform in that scenario."

Airbnb is down 13.1% since the beginning of the year, and at $114.30 per share, it is trading 29.2% below its 52-week high of $161.42 from February 2025. Investors who bought $1,000 worth of Airbnb’s shares at the IPO in December 2020 would now be looking at an investment worth $789.82.

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