Morgan Stanley Backs Booking Over Expedia as AI Reshapes Online Travel

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Morgan Stanley named Booking Holdings its top pick among online travel agents, arguing that artificial intelligence will reward scale and fragmented inventory while leaving Expedia and Airbnb with narrower paths to upside. Analyst Matthew Cost rates Booking Overweight with a $230 price target, implying 34% upside from Tuesday's close, citing its portfolio of 4.7M unique properties, global scale, and a single-platform agentic call option. Expedia earns an Underweight rating, as Cost sees a similar travel-specific AI agent opportunity but doubts the company can execute as quickly given weaker consumer engagement and an inconsistent track record, and he also flags Expedia's narrow P/E discount to Booking as a reason the spread should be wider. Airbnb was upgraded to Equal-weight from Underweight on the strength of its 90% direct traffic mix and platform improvements that make double-digit room nights growth more credible, though Cost says that growth is already priced in and material upside would require a further step-up in growth or margins. The rating changes moved all three stocks Wednesday, with Booking and Airbnb trading higher while Expedia slipped after a four-session winning streak.

Impact on stocks 4

Consumer Discretionary± Mixed · 3 stocks
Booking Holdings Inc
BKNG
▲ PositiveCapitalrelevance

Morgan Stanley named Booking its top pick with an Overweight rating and $230 price target, implying 34% upside.

Expedia Group Inc.
EXPE
▼ NegativeCapitalrelevance

Morgan Stanley rated Expedia Underweight, doubting it can execute the AI agent opportunity as quickly and flagging its narrow P/E discount to Booking.

Airbnb Inc
ABNB
▲ PositiveCapitalrelevance

Morgan Stanley upgraded Airbnb to Equal-weight from Underweight, citing its 90% direct traffic mix and platform improvements.

Financials▲ · 1 stocks
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