Airbnb (ABNB) and Snowflake (SNOW) have earned upgrades from Seeking Alpha analysts based on strategic pivots and successful operational initiatives, with Airbnb’s Project Y driving meaningful top-line acceleration. On the downgrade side, Enbridge (ENB) and Microsoft (MSFT) have been moved to Hold as analysts cite “priced to perfection” valuations and concerns over the return on massive capital expenditure programs.

Upgrades

• Airbnb (ABNB): Upgrade Hold to Buy by Dilantha De Silva. The analyst points to the success of Project Y initiatives in driving top-line acceleration and a surprising 6% year-over-year increase in Average Daily Rates, which dispels fears of oversupply.

“Project Y, Airbnb’s strategic initiative to accelerate growth through operational efficiencies and product innovation, contributed to the acceleration of growth in Q4. … Moving forward, as the Project Y model is implemented across its key global markets, I believe Airbnb is likely to see a major improvement in margins and also a meaningful revenue boost.”

• Snowflake (SNOW): Upgrade to Bullish by Uttam Dey. Snowflake is upgraded as valuation multiples compress to attractive levels and its backlog growth accelerates to 38%, signaling strong momentum for its “AI data cloud” platform.

“Snowflake’s Ramaswamy had done well to steer the company in the new age of AI, navigating the company towards a product roadmap that complemented AI’s aggressive data consumption pace. … I believe this is the time to begin buying shares because the markets are acting irrationally with Snowflake, compressing the company’s valuation multiples as a result and making shares look appealing again.”

Downgrades

• Enbridge (ENB): Downgrade Buy to Hold by KM Capital. Despite solid Q4 results, the analyst believes the stock is currently priced to perfection and faces long-term profitability risks due to a rapidly expanding $39 billion CapEx backlog.

“The fact that the CapEx budget is growing much more aggressively than the FY2026 adjusted EBITDA projected growth means elevated profitability compression risks for investors over the long term. … I believe that ENB is currently priced to perfection, which means that buying it despite robust Q4 earnings and positive FY2026 guidance is not a great deal.”

• Microsoft Corporation (MSFT): Downgrade to Hold by Rafa F. Oliver, CFA. The analyst adopts a cautious stance, highlighting that Microsoft has yet to prove a definitive advantage in AI leadership while facing intense competition and disappointing Copilot penetration at just 3.3% of total paid seats.

“We must analyze the Productivity and Business Processes too, where revenue growth is 15.9%, and margins are expanding from 57.4% to 60.4% due to incremental revenue growth due to Copilot. So, my perspective is that you have to see the benefits in the whole company and not only in the segment associated with CAPEX investments because the Microsoft model is integrated around AI.”

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The artificial intelligence bogeyman that has plagued the software as a service (SAAS) industry and fueled a bloodbath in the tech sector is unlikely to sabotage Airbnb (ABNB) even as the online travel agency (OTA) segment faces a seismic shift in

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Management View

• CEO Brian Chesky reported “strong results across the board” for Q4, highlighting 12% year-over-year revenue growth to $2.8 billion and a 16% increase in gross booking value to $20.4 billion. Chesky stated, “This was our highest growth quarter in more than 2 years. Nights and seats booked grew 10%, our strongest quarter of the year.” He attributed the acceleration to a deliberate strategy, including foundational technology rebuilds and the launch of Project Hawaii, a focused innovation initiative aimed at making it easier to find and book a home on Airbnb. Project Hawaii drove “hundreds of millions of dollars in revenue in 2025 alone” and is expected to deliver similar results in 2026.
• Chesky described new pricing initiatives as a key growth driver: “Reserve Now, Pay Later” launched in the U.S., letting guests book eligible stays with $0 upfront, “driving booking acceleration in Q4, especially for larger high-priced homes.” He said, “We believe that pricing initiatives will drive as much revenue this year as Hawaii and will remain a strong tailwind for years to come.” The company also removed over 0.5 million low-quality listings, while guest favorites grew 30% in 2025.
• International expansion was cited, with Brazil moving into Airbnb’s top five markets and becoming the second largest contributor to first-time bookers in Q4.
• The company announced a deeper push into new businesses: “We launched services experiences globally in May… We’re also starting to test new services like grocery delivery and airport pickup… bringing boutique and independent hotels onto the platform.” Chesky emphasized AI as a central pillar, noting the introduction of a custom AI agent now resolving “1/3 of the support issues without needing a live specialist.”
• Chesky introduced Ahmad Al-Dahle as CTO, calling him “one of the world’s leading AI experts,” to further drive the company’s AI strategy.
• CFO Ellie Mertz stated, “Q4 was a great quarter for Airbnb. Gross booking value grew 16% year-over-year to $20.4 billion, driven by strong growth in both bookings and price.” She highlighted the product roadmap’s positive impact, including Reserve Now, Pay Later, cancellation policy updates, and a move to a simplified fee structure. Mertz said, “Revenue was $2.8 billion, up 12% year-over-year and exceeded our guidance, driven by the impact of our product updates.”

Outlook

• Chesky stated, “We expect revenue growth to accelerate to at least low double digits in 2026. We expect adjusted EBITDA margins to be stable year-over-year.”
• Mertz guided for Q1 2026 revenue of $2.59 billion to $2.63 billion, representing year-over-year growth of 14% to 16%, including an approximate 3-point FX tailwind. She added, “We expect gross booking value to increase in the low teens year-over-year, driven by high single-digit growth in nights and seats booked and a moderate increase in ADR due to price appreciation and FX.”
• The company expects the One Big Beautiful Bill Act to “materially reduce our effective tax rate to the mid- to high teens” in 2026.
• Mertz added, “For the full year 2026, we expect year-over-year revenue growth to accelerate to low double digits with an ambition to grow even faster than that.”

Financial Results

• Q4 revenue was $2.8 billion, up 12% year-over-year.
• Adjusted EBITDA was $786 million, representing a 28% margin.
• Net income was $341 million, negatively impacted by approximately $90 million of one-time non-income tax.
• Free cash flow for Q4 was $521 million; for 2025, free cash flow was $4.6 billion (38% margin).
• The company held $11 billion of corporate cash and investments at the end of Q4.
• Share repurchases in Q4 totaled $1.1 billion, up from $857 million in Q3.

Q&A

• Richard Clarke, Bernstein: Asked about AI competition and the risk of sharing economics with AI platforms. Chesky responded that most of Airbnb’s value is in proprietary features, “We will be able to build everything everyone else will have if we use their models.”
• John Colantuoni, Jefferies: Questioned Asia-Pacific growth moderation and the impact of services and experiences. Mertz noted “stable” growth in APAC with strong results in India and domestic Japan, and highlighted that about 50% of experience bookings are from guests not staying in Airbnb homes.
• Lee Horowitz, Deutsche Bank: Asked about Reserve Now, Pay Later cancellations. Mertz said, “The cancellation curves have been very close to what we saw from a tested perspective… the aggregate nominal increase in cancellations rate, it’s approximately 1%.”
• Brian Nowak, Morgan Stanley: Asked about AI’s impact on gross margins. Chesky said, “Our investment in AI will not affect the P&L. I don’t think you’ll see it in the P&L.”
• Lloyd Walmsley, Mizuho: Inquired about hotel strategy and platform expansion. Chesky explained, “We’re opening the aperture and accommodations… AI allows us to personalize.”
• Justin Post, BofA Securities: Asked about improvements in repeat rates and customer service. Chesky stated, “Customer service is better than ever. We track NPS, and it’s the strongest it’s been since the pandemic by far, and it’s accelerating.”

Sentiment Analysis

• Analysts frequently pressed on AI risks, the scalability of new initiatives, pricing dynamics, and the hotel strategy, signaling a tone of cautious curiosity and some skepticism.
• Management maintained a confident and optimistic tone throughout, repeatedly emphasizing innovation and strategic focus. Chesky stated, “We believe we’re building something that’s impossible to replicate.”
• Compared to the previous quarter, management’s tone was more assertive regarding acceleration and the impact of new initiatives, while analysts maintained a similar level of curiosity and scrutiny.

Quarter-over-Quarter Comparison

• Q4 saw a more pronounced focus on the roll-out and impact of pricing innovations (Reserve Now, Pay Later), explicit expansion into hotels and services, and the AI-native vision, compared to Q3’s broader focus on product improvements and initial pilots.
• Guidance was more specific, with Chesky projecting at least low double-digit revenue growth for 2026, whereas Q3 guidance deferred specifics to the next call.
• Share repurchases increased, and the effective tax rate outlook improved with the One Big Beautiful Bill Act.
• Analysts focused on the scalability and financial implications of recent initiatives, while management showed increased confidence in the scalability of innovation and margin stability.

Risks and Concerns

• Management acknowledged that “we can’t predict every quarter with precision. Travel is influenced by everything from currency to macroeconomic conditions to global events.”
• Chesky highlighted AI as a strategic defense against disintermediation but noted the unpredictability of AI evolution.
• Analysts questioned the risks associated with AI platform integration, expansion into hotels, and the impact of cancellation policies.
• Mertz addressed potential impacts of Reserve Now, Pay Later cancellations, describing the increase as modest and under control.

Final Takeaway

Airbnb closed 2025 with strong momentum, driven by deliberate innovation in pricing, AI, and platform expansion, including new services and hotels. Management emphasized a stable margin outlook, robust free cash flow, and a strategic focus on scaling successful pilots globally. With guidance pointing to at least low double-digit revenue growth in 2026 and ongoing investment in technology, the company is positioning itself for accelerated growth while continuing to return capital to shareholders.

Read the full Earnings Call Transcript

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However, a more important measure of profitability for the company showed improvement from a year ago and beat expectations. Adjusted EBITDA increased 3% to $786M, topping estimates by $21M.

For the reported quarter, Airbnb (ABNB) experienced a 16% increase in gross bookings to a better-than-expected $20.4B, a 10% gain in nights and seats booked, and a 6% gain in gross booking value per night and seats booked.

This contributed to total revenue of $2.78B, a 12% increase from a year ago and $70 million better than estimates.

For the current quarter, the company expects to generate $2.59B to $2.63B in revenue, representing growth of 14% to 16% and above $2.53B estimates. Gross bookings are seen increasing in the low teens, driven by high-single-digit growth in nights and seats booked.

Adjusted EBITDA is expected to be flat from 2025.

For FY26, revenue growth is expected to be in the low double-digits, and “stable” adjusted EBITDA due to investments in marketing, product, and technology.

“These results reflect the strength of our core business and the durability of our long-term strategy.We’re driving growth by staying focused on four key areas: making the Airbnb service better, bringing Airbnb to more parts of the world, expanding what we offer, and integrating AI into our app,” the company said on its website.

Shares are up ~5% in Thursday’s after-hours trading.

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The consensus EPS Estimate is $0.66, while analysts see revenue of $2.71B, representing a 9.3% year-on-year jump. Over the last 3 months, EPS estimates have seen 3 upward revisions and no downward moves. Revenue estimates have seen 14 upward revisions and 3 downward moves.

Last quarter, the vacation rental company guided for Q4 revenue in the range of $2.66 billion to $2.72 billion. It anticipates a full-year adjusted EBITDA margin of about 35% while GMV is expected to grow in low double digits year-over-year, CFO Ellie Mertz had said.

Airbnb introduced its Reserve Now, Pay Later option in the United States in the third quarter, helping drive bookings during Q3. It expects the feature to support momentum into Q4, with a broader rollout planned this year.

Seeking Alpha analyst IWA Research said that Q4 is likely to see more volatility as the firm should release guidance for 2026.

“I’ll look out for their investment plans going into this year and growth expectations. I’ll also pay attention to what they decide to do with their notes, as they have plenty of cash or investments to pay them, which would likely be more efficient than issuing debt,” the analyst added.

The stock has lost over 11% in the year so far compared to a 1.41% rise in the broader markets.

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Revenue per available room at ultra-luxury hotels rose 10.6% in 2025, more than triple the growth rate of the overall hotel industry, according to data from CoStar. Average daily room rates climbed to a record $1,245, while occupancy also increased, suggesting demand held firm despite higher prices.

Hotel operators have increasingly focused on wealthier guests whose fortunes have been boosted by rising asset markets and who are less sensitive to price increases. By contrast, demand for luxury goods such as clothing and jewelry has weakened, with consultancy Bain estimating global sales of personal luxury items fell about 2% last year.

The divide was especially clear in the United States, where hotels at the top end outperformed midscale and budget operators as higher-income consumers continued to travel while others cut back. Some luxury hotels have also raised prices to offset labor shortages and higher operating costs, choosing to sell fewer rooms at higher rates.

Operators are justifying higher prices by expanding wellness-focused amenities, including treatments and technologies aimed at longevity and health. These features, hoteliers say, help sustain pricing power even if many guests never use them.

Industry analysts note that confidence among ultra-luxury hotels has grown, helped by younger high-net-worth travelers, including those enriched by cryptocurrency gains. Still, some warn the strategy carries risks, as higher prices leave little room for service missteps and could eventually test even wealthy customers’ willingness to pay.

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The proliferation of AI-driven search engines and their ability to mimic services provided by OTAs threatens traffic to OTAs, increases customer acquisition costs, and disrupts OTAs dominance in the travel segment.

“Online travel is a vivid test of how AI could disrupt the aggregator model,” a study from Harvard Business Review says, adding that “Google is keeping travelers inside its AI-enhanced search environment longer and helping them curate trips before they leave the results page.”

This leaves OTAs with few opportunities to cross-sell products, “weakening the network effects that supports their scale.”

Reflecting investors’ concern surrounding this disintermediation risk from AI capabilities into Q4 results next week, UBS analyst Stephen Ju doesn’t see a “material shift” in this debate. Besides Expedia (EXPE), which saw a rerating in 2025, the others have ceded ~10% off the multiples they enjoyed from 2025 to the first half of 2025.

“Although we find it difficult to believe that management teams will elect to transfer top-of-marketing-funnel travel research even further to both Google and [large-language models], we do not expect any resolution on the AI risk this year,” Ju says, adding that positive rerating to multiples seems unlikely.

For this reason, Ju favors Booking Holdings (BKNG) shares over peers like Expedia (EXPE), Tripadvisor (TRIP), and Trivago (TRVG), as Booking (BKNG) has seen the greatest amount of risk already priced in.

Of the group, Expedia (EXPE) is taking on the heaviest loss, down 8%, followed by -6.4% for Booking (BKNG) and -5% for Airbnb (ABNB).

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Online travel stocks fell on Wednesday on new data that showed international tourism to the U.S. is weakening.

While the World Travel & Tourism Council reported that global tourism spending rose 6.7% in 2025, reaching about $11.7 trillion, the U.S. registered a 6% drop in foreign visitors in 2025, with international tourist spending falling 7% as arrivals from key markets such as Canada, Mexico, and Europe declined notably. The World Travel & Tourism Council estimated that about 68 million foreign tourists visited the U.S. last year, well below France’s 105 million and Spain’s 96.5 million visitors. Despite the international weakness, strong domestic travel has helped keep the U.S. the world’s largest overall travel and tourism economy, even as it loses market share in the global competition for international visitors.

Analysts have pointed to backlash against U.S. immigration policy as one of the factors in the decline in foreign tourism.

Decliners include Airbnb (ABNB) -6.6%, Expedia (EXPE) -5.7%, Booking Holdings (BKNG) -4.2%, and Global Business Travel Group (GBTG) -5.5%.

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