AI sell-off in this travel stock looks overdone, says Morgan Stanley

NoodlesOrTokens · 2026-02-24T12:16:36+00:00

Morgan Stanley upgraded Booking Holdings, citing less threat from AI than anticipated. Analyst Brian Nowak noted Booking's ability to retain customer data and leverage its inventory, suggesting it will remain vital in the online travel industry despite recent share declines.

NoodlesOrTokens

2026-02-24 12:16:36

Abstract generation in progress

Morgan Stanley believes that immediate concerns about artificial intelligence look premature when it comes to Booking Holdings . The bank upgraded the travel technology company to overweight from equal weight. Analyst Brian Nowak lowered his price target to $5,500 from $6,150, though the new forecast still signals a gain of 42%. Shares of Booking have plunged 23% over the past 12 months and 28% this year alone. But Nowak is less concerned about artificial intelligence threatening Booking than the recent sell-off might imply. BKNG 1Y mountain BKNG 1Y chart “We see BKNG staying a key driver of travel even as agentic tools evolve. BKNG will still own the customer, capture robust traveler data and use those to drive high margin direct business,” he wrote. “Agents also need BKNG’s leading inventory, giving BKNG leverage.” Nowak noted that while generative AI will create new products, these early agentic travel products are developing differently than investors had necessarily expected. For instance, they still seem to divert traffic to online travel agencies, or OTAs, like Booking for purchase, and still share data with such websites in exchange for access to their critical inventory, Nowak wrote. “We see OTAs’ ability to remain the merchant of record and still capture consumer browsing and purchase data as being key to their long-term business … as in effect, we think the stage is setting up for BKNG and the OTAs to remain just as critical to the long-term online travel landscape as they are now,” the analyst said. “We think the online travel industry structure is likely to stay closer to paid search than currently appreciated … as the OTAs will integrate their inventory into agents, bid on advertising to win traffic and transactions … and subsequently work to convert this traffic to future direct customers.” Nowak nodded to Booking’s more than 20-year history of leading execution in this type of environment, and expects the company to continue leading the charge going forward.

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