Morgan Stanley gives Booking Overweight rating and a $230 price target

Booking Holdings stock has fallen 23% over the past year, and the dip after Morgan Stanley's bullish call suggests investors are still weighing the sector-wide narrative that AI search tools and chatbots could cut travel platforms out of the booking process. Morgan Stanley directly pushed back on that idea, arguing AI works more like a new search layer that sends high-value traffic to platforms rather than replacing them.

The bank supported its view with Booking's scale: 4.7 million unique properties, a direct booking mix in the mid-60% range, and more than 20 years of navigating past shifts in how people search for and book travel. It also pointed to Booking's own Q2 results, where room nights rose 5%, gross bookings rose 9%, and adjusted EBITDA grew faster than revenue. Management raised its cost-savings target for the year from $550 million to $650 million, giving it more room to invest in AI tools like its Priceline Penny assistant without hurting margins.

Whether the call holds up depends on whether AI tools truly function as a traffic layer for online travel agencies or route bookings elsewhere. Morgan Stanley expects online travel bookings to grow about 7% annually from 2026 through 2030, and it sees roughly $700 billion in bookings still happening offline. For Booking and its peers, the test is whether that growth lands on their platforms or on AI assistants that sit between travelers and the booking.