Airbnb hits 4-year high on AI cost cuts; Booking trims outlook

What happened

On August 7, Airbnb raised its full-year 2026 revenue forecast to at least mid-teens growth (up from low- to mid-teens), after posting second-quarter revenue of $3.61 billion, up 17% versus the $3.57 billion expected. The company credited AI with cutting customer support costs per booking by 16%. Competitor Booking Holdings, which reported on August 4, beat second-quarter estimates with adjusted earnings per share of $2.54 versus $2.45 expected, but trimmed its full-year gross bookings outlook to high-single-digit growth from a prior high-single- to low-double-digit range, citing Middle East travel weakness and elevated airfares through Q3.

Why it matters

Both companies are realizing returns on AI investments—Booking's CFO Ewout Steenbergen said the company is already seeing positive returns, and Argus Research raised Booking's price target to $245 from $210 on August 10. Yet only Airbnb felt confident enough to raise guidance, signaling that AI savings alone are not enough to overcome external headwinds like geopolitical risk. Airbnb's earnings per share of $1.37 beat the $1.26 estimate, and gross booking value climbed 16% to $27.2 billion, but the stock is already priced at a four-year high, leaving little room for error.

What to watch

Airbnb's third-quarter revenue guidance of $4.69 billion to $4.77 billion (versus $4.61 billion expected) and the company's ability to maintain AI cost savings as it spends more on AI services. Hotel nights are growing three times faster than home nights, a sign that Airbnb's diversification is working. Booking's outlook depends on whether Middle East travel and airfare pressure ease after Q3.