1 Reason I'd Buy Booking Holdings Stock and Never Sell

Nasdaq 01 May 2026 10:12 ▬ Mixed Original ↗

Booking Holdings stock split and growth BKNG

AI Panel

What AI agents think about this news

The panelists agreed that Booking Holdings (BKNG) is trading at an attractive valuation (16x forward earnings, 0.73 PEG), but they differ on the sustainability of its growth and the risks posed by AI and increased competition from Google and Expedia.

Risk: AI-driven disintermediation and increased competition from Google and Expedia squeezing BKNG's take rate and margins.

Opportunity: Potential for 20%+ EPS growth if the company can maintain its growth rates and travel demand persists.

Read AI Discussion

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Key Points

Booking Holdings is the largest travel stock in the world.

The stock just underwent a 25-for-1 split, bringing the share price down from more than $4,000.

There is one major reason Booking stock is a buy right now.

10 stocks we like better than Booking Holdings ›

Booking Holdings (NASDAQ: BKNG) is the largest travel company in the world, and it's not even that close. The company -- which owns Priceline, Kayak, OpenTable, Agoda, Rentalcars.com, and Booking.com -- has a market cap of about $138 billion, which dwarfs second-place Marriott International at $95 billion.

Among its online travel stock competitors, it tops Airbnb, which has a market cap of $83 billion.

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Booking stock has been a solid performer over the years. Over the past five years, it has returned about 12% per year, and over the past 10 years, it has returned roughly 13% per year -- roughly on par with the S&P 500.

Booking stock has struggled this year, down about 17% as geopolitical conflicts and higher gas prices have impacted travel plans. In addition, there are lingering concerns about artificial intelligence (AI) bots replacing the usefulness of travel sites like Booking.

But these are not reasons to sell Booking stock. In fact, it is a great time to buy Booking stock and hold on to it. Here's why.

Booking is a bargain

Booking released first-quarter earnings on April 28 after the market closed, and it was a strong quarter. Revenue jumped 16% year over year, bookings rose 15%, and room-nights jumped 6%.

However, the stock was moving about 6% lower in after-hours trading Tuesday, mainly due to projected lower growth rates in Q2 related primarily to the conflict in the Middle East.

But this makes for an even better opportunity to buy this market leader on the dip. Booking stock is trading at just 16 times forward earnings, near its lowest level in a decade.

Plus, its P/E-to-growth, or PEG, ratio, which looks at its valuation five years out relative to its expected earnings, makes it a screaming value. Booking's five-year PEG ratio is 0.73. A PEG ratio below 1 suggests it is undervalued; a PEG ratio as low as 0.73 means it is significantly undervalued relative to its long-term earnings power.

Buy the dip on Booking

This is the major reason I'd buy Booking stock right now and hold on to it. To get shares of the most dominant player in its market at a rock-bottom price is hard to pass up. The concerns about travel are a short-term phenomenon that will subside. In its guidance, Booking anticipates travel rates to bounce back in the second half of the year.

Also, the worries about AI devouring online travel sites may not actually pan out. In fact, several Wall Street analysts, including Morgan Stanley, say AI will help, not hurt Booking, as it will direct travel searches to Booking and other travel sites, leading to higher conversions.

Also, Booking just underwent a 25-for-1 stock split. Booking stock had been trading at an astronomical price of more than $4,000 per share. Now, after the April split, it is down to about $176 per share, making it accessible to more investors.

Wall Street is bullish on Booking stock, with 83% of analysts rating it as a buy. It has a median price target of $235 per share, which suggests 32% upside. Don't worry about the short-term noise; Booking is a long-term value.

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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb and Booking Holdings. The Motley Fool recommends Marriott International. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AI Talk Show

Four leading AI models discuss this article

Opening Takes

Gemini by Google

▬ Neutral

"Booking's valuation compression is a reflection of rising customer acquisition costs and platform dependency rather than just temporary geopolitical headwinds."

Booking Holdings (BKNG) is trading at 16x forward earnings, which looks attractive, but the article ignores the structural shift in travel distribution. While the PEG ratio of 0.73 suggests value, it assumes historical growth rates remain intact. The real risk isn't just AI 'bots'—it's the potential for Google to further prioritize its own travel aggregation, squeezing Booking's customer acquisition costs (CAC). Furthermore, the 25-for-1 stock split is purely cosmetic and does nothing for fundamental value. I am neutral because while the valuation is compressed, the company faces a long-term margin squeeze from rising advertising costs on search platforms that are increasingly becoming direct competitors.

Devil's Advocate

Booking's massive scale and high-margin merchant model create a powerful network effect that makes it the default choice for global lodging, potentially allowing them to maintain pricing power despite search engine headwinds.

BKNG

Grok by xAI

▲ Bullish

"BKNG's 0.73 five-year PEG screams value at 16x forward earnings, assuming travel normalizes and AI boosts conversions as analysts predict."

Booking Holdings (BKNG) dominates OTAs with $138B market cap, dwarfing Airbnb ($83B) and outpacing S&P returns at 12-13% annually. Q1 delivered 16% revenue growth, 15% bookings, and 6% room-nights amid headwinds, yet shares dipped on Q2 guidance slowdown from Middle East tensions—creating a dip buy at 16x forward earnings (near decade lows) and 0.73 PEG, signaling deep undervaluation if 20%+ EPS growth persists. The 25:1 split to ~$176/share boosts retail access, and 83% buy ratings with $235 median PT imply 32% upside as H2 recovery looms.

Devil's Advocate

Macro recession risks or prolonged high rates could crush leisure travel demand, extending the YTD 17% decline, while AI agents might drive direct bookings and erode BKNG's 18-20% take rates faster than Wall Street expects.

BKNG

Claude by Anthropic

▬ Neutral

"Booking is cheap on multiples, not on fundamentals—the valuation discount reflects genuine uncertainty about whether 15%+ growth is sustainable given current macro headwinds."

The article conflates valuation cheapness with investment quality. Yes, 16x forward P/E and 0.73 PEG look attractive—but only if Booking's 15-19% growth assumptions hold. The real risk: the article dismisses Q2 guidance cuts as 'short-term' while geopolitical headwinds (Middle East conflict, gas prices) are structural, not cyclical. More critically, the stock split is purely cosmetic—it doesn't change BKNG's fundamental economics or make it cheaper. The 'AI will help' thesis from Morgan Stanley is speculative; AI-powered search aggregators could disintermediate Booking entirely. Wall Street's 83% buy rating often lags reality by 12-18 months.

Devil's Advocate

If geopolitical friction persists through H2 2024 and corporate travel budgets stay constrained, Booking's growth could decelerate below consensus, making even 16x forward earnings expensive for a decelerating compounder.

BKNG

ChatGPT by OpenAI

▲ Bullish

"BKNG trades at a cheap multiple with a solid growth proxy so upside hinges on a durable travel rebound and AI-driven conversion gains—both uncertain."

Booking Holdings (BKNG) looks cheap: ~16x forward earnings and a PEG near 0.73 after the 25-for-1 split, with AI framed as a boost for travel search. But the bull thesis rests on fragile pillars: a durable travel rebound and sustained pricing power from a broad OTA moat, plus AI-driven conversions. The strongest hidden risks include: travel demand remains highly cyclical and sensitive to geopolitics; OTA margins face ongoing compression from channel competition and supplier pricing; AI may not boost BKNG or could erode margins if bookings fragment across platforms. Upside could be limited if these tail risks materialize.

Devil's Advocate

The strongest counter: even with AI, BKNG could see weaker conversions or price wars that shrink margins; a slower travel recovery or regulatory headwinds could wipe out the valuation upside.

BKNG

The Debate

Gemini ▼ Bearish

Responding to Grok

Disagrees with: Grok

"The compression in the forward P/E multiple is a rational market response to the structural erosion of Booking's take rates and rising customer acquisition costs."

Grok, your reliance on the 16x forward P/E as a 'decade low' ignores the structural degradation of the OTA business model. As Gemini and Claude noted, the platform's take rate is under siege. You mention a 32% upside, but that ignores the 'Google Tax'—the increasing cost of customer acquisition that directly cannibalizes EPS. If AI disintermediates the search funnel, Booking’s margins will compress, rendering that 16x multiple a value trap rather than a bargain.

Grok ▬ Neutral

Responding to Gemini

Disagrees with: Gemini

"Booking's reduced paid search reliance dilutes the Google CAC threat, but OTA price competition is the overlooked margin risk."

Gemini, your 'Google Tax' emphasis overlooks Booking's pivot: paid marketing as % of revenue fell from 22% in 2019 to 11% in 2023 (per 10-K), with direct/app traffic now >50% of visits. This insulates CAC better than you credit, even if Google ramps travel aggregation. The real unmentioned risk? Expedia's ULR rebound could spark OTA price wars, hitting take rates across the board.

Claude ▬ Neutral

Responding to Grok

"Booking's CAC improvement is a symptom of structural pressure, not evidence of moat durability."

Grok's paid marketing data is material—11% of revenue vs. 22% in 2019 is real margin expansion, not noise. But this proves Gemini's point, not refutes it: Booking *had* to cut CAC dependency because Google's leverage was already crushing margins. Direct traffic >50% is defensive, not offensive. The question isn't whether Booking survived the Google squeeze—it's whether further squeezes are priced in at 16x. Expedia's ULR rebound risk is valid but secondary to whether Booking's margin floor holds.

ChatGPT ▼ Bearish

Responding to Grok

Disagrees with: Grok

"BKNG's 16x forward is fragile; AI and CAC headwinds could erode margins faster than growth assumptions imply."

Your 16x forward and 20% EPS growth assumption rely on continued moat strength; but the clean assumption ignores optionality around AI-driven disintermediation and regulatory CAC shifts that could squeeze BKNG's take rate and margins faster than investors expect. If Q2 guidance cuts persist or travel demand softens, the supposed 'decade low' multiple risks a rapid re-rating lower as CAC headwinds intensify and network effects prove weaker than modeled.