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Overblown AI Competition Worries Sees Rating Change for Booking Holdings (BKNG)

We recently published 12 Best Consumer Cyclical Stocks to Buy According to Analysts.  Booking Holdings Inc. (NASDAQ:BKNG) is one of the best consumer cyclical stocks

Booking Holdings Inc. (NASDAQ:BKNG) is a software firm that provides travel services through its web and other platforms. It is one of the largest firms of its kind with more than four million properties in its portfolio.

As of November 28th, 23 out of 39 analyst recommendations for Booking Holdings Inc. (NASDAQ:BKNG) were a Buy. Among the remaining 16, five were a Strong Buy while 11 were Hold. The average share price target for Booking Holdings Inc. (NASDAQ:BKNG) was $6,207.21

Booking Holdings Inc. (NASDAQ:BKNG)’s shares were upgraded to Buy from Neutral by Bank of America on November 24th. While the bank kept a $6,000 share price target, it outlined that the impact on the shares from worries about competition from AI was overdone. BofA added that Booking Holdings Inc. (NASDAQ:BKNG) stood to benefit from its close relationships with hospitality firms, as it allowed it to retain users on its platform and enjoy an advantage over AI platforms through offering better deals.

Photo by Andrew Ruiz on Unsplash

Better deals, margins, and metrics such as revenue per available room are key determinants of Booking Holdings Inc. (NASDAQ:BKNG)’s performance. The firm’s latest earnings report and the associated earnings call saw management and analysts discuss them. For instance, during the earnings call, after JPMorgan’s Douglas Anmuth asked management about their thoughts on the traffic shift from direct and Google to AI platforms such as ChatGPT, CFO Ewout Steenbergen remarked:

“Yes, maybe a couple of points, Doug. Just you also asked about the economics and some of the data. So first of all, what we are seeing in terms of traditional search that we still see volume growth. So travel clicks that are coming to us from traditional search are still going up year-over-year. That, of course, might change over time, but I think that is an important data point. The other is the number of leads that we’re receiving from large language models relatively small, but it is growing. And probably over time, these 2 worlds might become more hybrid because we are seeing, of course, more AI being built into browsers at this point in time. What are we measuring in terms of impact, ultimately, faster search, better conversion, lower cancellation rates and higher customer satisfaction, very early signals we’re having around it. But overall, very encouraged we are with what we are seeing at this moment.”

While we acknowledge the risk and potential of BKNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BKNG and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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