Booking Holdings Inc. (BKNG) Poised to Thrive in an AI-Driven Travel Market

Booking Holdings Inc. (NASDAQ:BKNG) is one of the best blue chip stocks to buy for the long term. On February 28, Morgan Stanley argued that online travel agencies (OTAs), with Booking Holdings Inc. (NASDAQ:BKNG) as the prime example, are better positioned to benefit from AI than widely feared. This stance directly challenges the consensus view that AI agents will disintermediate traditional booking platforms.

The bank’s key finding is that early agentic AI travel tools are not bypassing OTAs. Instead, they are redirecting users back to their apps and websites to complete bookings. This is because major AI platforms are reluctant to act as merchants of record given the payment risk, customer service burden, refund liabilities, and regulatory obligations involved.

This dynamic preserves Booking’s most critical structural advantage, which is that it remains the merchant of record, said Morgan Stanley. The bank added the Booking retains ownership of the transaction and continues to capture valuable consumer browsing and purchase data. These assets, said Morgan Stanley, are making Booking an indispensable partner in an AI-driven travel world rather than a casualty of it.

In a different update, on February 19, Benchmark cut its price target on Booking to $5,600 from $6,400 while maintaining a Buy rating. The analyst cited valuation concerns even as the company delivered a strong Q4 FY2025 earnings report.

In the earnings report, Booking’s quarterly revenue was $6.35 billion, up 16% year over year and surpassed estimates by 3.87%. The $43 billion gross bookings came in $1 billion ahead of consensus, and room nights grew 9% to 285 million.

Regardless, Benchmark noted two issues that tempered the enthusiasm. First, the quarter showed surprise marketing deleverage, which means marketing costs rose faster than expected relative to revenue. Second, Q1 FY2026 room-night guidance came in below Wall Street expectations, even as rival commentary had pointed to stronger trends ahead.

Booking Holdings Inc. (NASDAQ:BKNG) operates online travel and reservation services through brands such as Booking.com, Priceline, Agoda, Rentalcars.com, and KAYAK. The company provides platforms for lodging, flights, rental cars, and vacation packages.

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