Value Investigator
Quality-Growth Investor, Fundamental Research & Portfolio Strategy
AI price-comparison risk to Booking Holdings is a big nothing burger, since Google and Google Maps have offered comparisons for ages. Personal checks find Google showing no better price than Booking about two-thirds of the time, and saving a few euros is not worth another spam account or the lost time. Having all bookings in one app is also far more convenient than digging through a messy Gmail inbox. x.com x.comÂ
Booking Holdings is a 15% EPS compounder at 17x earnings, a great company with a long growth runway at a very reasonable price. Geopolitical travel risk does not matter even in the midterm: flights and hotels are in line with recent trends, and people can vacation closer to home. Rivals with less supply rarely beat it; Booking still has the best price about 80% of the time a decade after its best-price guarantee was banned, and it is too important a partner for hotels to cross. x.com x.com x.com x.com x.com x.comÂ
Booking Holdings looks ridiculously cheap against its own history, and its business and moat inspire much more confidence than Uber's even with AI risk. Its P/FCF is 11.94, versus a ten-year median of 18.85. x.comÂ
Booking Holdings' valuation is quite clearly attractive, though AI agents may roam around and book hotels directly for people. Google I/O raised concerns about most internet names, leaving it unclear whether agentic AI will really hurt Booking. x.com x.comÂ
AI agents threaten Booking Holdings' margins. That view could change if the company adapts, pivots and proves otherwise. x.comÂ
Google's search is becoming less profitable as AI agents disrupt its core business. Even perfect execution could make the transition painful, and Google is famously poor at new products. Its conduct over the past decade also raises stronger ethical objections than Meta's. Despite strong fundamentals, explosive cloud growth, no real risk and substantial growth ahead, Alphabet is unattractive relative to most other major AI companies. x.comÂ
AI disruption of Google's search business remains a reason to be bearish on Alphabet. Rose had reached a similar view before Drew Cohen argued that shopping and travel agents could divert monetizable searches from Google's sponsored ads. The stock's rise has not changed that bearish view. x.comÂ
Booking Holdings faces a valid long-term bear case as AI agents could take a share of the 13-18% online travel take rate. Testing Meta's Muse and Instinct for a hotel search showed them drawing on Booking and Expedia inventory for now, but agents could eventually build direct ties with long-tail hotels, better reviews and pre- and post-booking service at lower fees. OTAs' own agents look mediocre and lack users' context. At 13x 2027 EPS it tempts as a contrarian long, but looks too tough. x.com … Show more
Alphabet's businesses beyond search are why it will lead the real AI boom. Google Cloud, DeepMind and Waymo broaden its reach, and its $900 million SpaceX investment is now worth $85 billion. Fear emerging as the shares fall is an opportunity; a decline toward the buy zone is welcome, even as Q3 capex has taken a large hit out of free cash flow. x.com x.com x.com x.comÂ
Alphabet's search monopoly faces a different competitive game as agent companies build their own search tools. Google Cloud grew 103%, but that was not enough to offset disappointing ads growth. Its only path is to accelerate AI training and keep spending on capex. Search will never be the same, and the risk-reward has changed, though Alphabet remains an optimistic prospect. x.com x.com x.comÂ
Booking Holdings, Tripadvisor, Expedia and Trip.com are in AI's crosshairs as AI apps make booking travel easy without them. In quick testing, booking a flight on Meta's new app was very easy, working through Duffel or the carrier's own website. x.comÂ
AI search threatens Google's advertising economics because it competes with the ad business itself, potentially reducing the value advertisers receive. The bear case is that AI eats Google's Search ad business faster than Google's AI spending pays for itself. x.com x.com x.comÂ
