Booking and Airbnb Stocks: Is the AI Sell-Off Overdone?

During their recent episode, Taylor, Carlisle, and Jonathan Boyar discussed Booking and Airbnb Stocks: Is the AI Sell-Off Overdone? Here’s an excerpt from the episode:

[Jonathon] Yeah. I mean, listen, everything is impacted by AI in positive and negative ways. But, you know, Muse came out, you know, we’re recording this on September 29th, a couple of weeks ago, and it hit Airbnb hard.
It hit booking hard. You know, Goldman came out with one of these baskets, which usually are pretty self-serving for their clients. I think it was the Investor’s Inertia Basket, they called it.

Some desk analysts came out with it. It was a one-page report that took away tens of billions of dollars of stock market value, if not hundreds of billions. So take that for what it’s worth.

But they’re saying something like booking is not going to be necessary. And it’s ridiculous. You know, they said, you know, Google tried to take it over, not the company, but tried to take the space.

They couldn’t do it. They have a tonne of resources. TripAdvisor tried to do it.

They couldn’t do it. Booking is competitively advantaged, and it would very difficult for someone to replicate what they’ve done. And what they’ve done is they’ve gone to these small and mid-sized, like, boutique-y type of hotels and have inventory from them, and they make it very profitable for the companies to list on booking.

And Muse is not going to do that. Muse is not going to be able to handle cancelling reservations, dealing with the hotels, dealing with all the intricacies of travel, dealing with the EU regulations. And now you’re able to buy the stock at a discounted multiple.

And, you know, I’m happy about that, and I’ll take it. And at some point in time, the market will get rational and realise that this is a very high-quality business.

[Tobias] Does Airbnb fall into that same bucket? Is that one that you’ve looked at closely?
[Jonathon] Yeah. I mean, I think that’s even more absurd.
At least you can make, I think, the argument on booking that Muse could, and I don’t think it’s true, but Muse could disrupt them. But Airbnb has supply. How is Muse going to go out and, you know, are they going to individually ask every homeowner, will you rent out your home for you?

Like, it just makes absolutely zero sense. I think these things are, you know, Muse and the other agents that are inevitably going to come out are going to help these businesses because it’s just going to make travel, booking travel, easier. And it’s also going to give people a lot more free time.

So AI is a beneficiary of these companies. You know, Airbnb in particular noted on their last earnings call how much they’re saving, how much more productive AI is helping them. So helping them to be.

So, yeah, I think the in this case has overshot. And I think a lot of the reasons why this happens is, one, obviously, people are extremely short of short term time horizons. They shoot first, ask questions later.

But you also have, you know, pod shops that, you know, will get out of these things really quickly. And if they turn a couple percent, they liquidate and that selling begets selling. So there’s a structural part of the market that creates these opportunities.

And if you have, you know, a time horizon that’s more than, you know, six months to a year, which we do and you do, I think this is a great thing for us.