Booking Holdings Inc. (BKNG): A Bull Case Theory

We came across a bullish thesis on Booking Holdings Inc. on Nikhs’s Substack. In this article, we will summarize the bulls’ thesis on BKNG. Booking Holdings Inc.'s share was trading at $4,914.69 as of November 28th. BKNG’s trailing and forward P/E were 31.99 and 18.76 respectively according to Yahoo Finance.

Booking Holdings Inc., together with its subsidiaries, provides online and traditional travel and restaurant reservations and related services in the United States and internationally. BKNG is undergoing a structural transformation the market still values as cyclical travel, even as its business model has quietly shifted into a high-margin payments platform.

With 72% of transactions now processed through its merchant-of-record model—up sharply from 50% two years ago—Booking increasingly controls the entire payment flow, gaining float income, working-capital leverage, and scalability more typical of fintech than online travel. This shift is already reshaping profitability, with facilitating payments generating incremental revenue faster than incremental costs and EBITDA margins reaching 47%.

The merchant model also strengthens Connected Trip bundling and Genius loyalty, enhancing customer retention, lifetime value, and supplier participation. Meanwhile, the $457 million KAYAK impairment reflects not weakness but strategic clarity: AI is commoditizing meta-search, but Booking’s value lies in orchestrating and settling multi-vertical travel transactions—something AI agents cannot do without Booking’s global payments infrastructure.

Connected Trip penetration is rising in the low double digits with mid-20s% growth, driving higher-frequency, higher-LTV customers whose behavior compounds the merchant model’s economics. Genius further accelerates this flywheel by improving conversion and retention while attracting property participation at scale.

Although Q4 guidance appears cautious, it likely reflects tough comps and conservative management rather than demand deterioration, especially as cost-saving targets and EBITDA guidance were raised. The strategic trajectory is clear: Booking is positioning itself as the transaction and settlement layer for global travel, an infrastructure advantage reinforced by network effects, data scale, and regulatory complexity. If merchant mix surpasses 75% and Connected Trip adoption continues accelerating, the market will be forced to re-rate Booking not as a travel company, but as a global payments platform embedded in the travel ecosystem.

Previously we covered a bullish thesis on Booking Holdings Inc. by Jimmy Investor in April 2025, which highlighted the travel rebound, growth of OTAs, and Booking’s global platform strength. The company’s stock price has appreciated approximately by 7.46% since our coverage. This is because the thesis played out. The thesis still stands as fundamentals remain strong. Nikhs shares a similar view but emphasizes Booking’s shift toward a payments-driven operating model.

Booking Holdings Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 92 hedge fund portfolios held BKNG at the end of the second quarter which was 102 in the previous quarter. While we acknowledge the potential of BKNG 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.

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Disclosure: None.