Why Airbnb Stock Keeps Going Up
Key Points
CEO Brian Chesky is integrating AI throughout Airbnb's operations.
The company's bountiful free cash flow gives shareholders multiple ways to win.
Shares of Airbnb (NASDAQ: ABNB) furthered their ascent on Thursday, as investors continue to price in the vacation rental company's strong second-quarter report and artificial intelligence (AI)-powered expansion initiatives.
Image source: Getty Images.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
AI-driven gains
Airbnb's revenue jumped 17% year over year to $3.6 billion in the second quarter, boosted by higher travel demand for the FIFA World Cup.
Nights and seats booked on its platform increased 10% to 148.3 million, fueling a 16% rise in gross booking value to $27.2 billion.
CEO Brian Chesky said AI was also helping to drive Airbnb's sales and profits higher. AI is making it easier for hosts to list properties and for guests to find them. It's also enabling Airbnb to roll out new features faster.
"We've rebuilt Airbnb from the ground up to be an AI-native company, and it's showing up in our results," Chesky said in a letter to shareholders.
All told, Airbnb's free cash flow surged 30% to $1.25 billion.
Acquisitions could accelerate Airbnb's growth
That robust cash flow provides Airbnb with considerable optionality.
The travel platform is expanding beyond short-term house rentals to include hotel stays, car rentals, grocery deliveries, and other services. All of which offer Airbnb potential acquisition prospects.
"Entrepreneurs would love to be part of Airbnb and to hold stock," Chesky said during a conference call with analysts. "So, I think there's a huge number of opportunities for us."
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb. The Motley Fool has a disclosure policy.