Key Takeaways
- Airbnb CEO Brian Chesky said this week that a lot of the traffic Airbnb gets from ChatGPT converts better than traffic from Google.
- That threatens the premium advertisers pay Google for high-intent search clicks, even before AI agents can book trips on their own.
- Analysts still expect Alphabet’s revenue to grow every year through 2028, and its operating margin held at about 32% in 2025.
- Alphabet trades at 24.4 times forward earnings, a little above its three-year average, so the stock isn’t priced for search losing its edge.
Booking Holdings (BKNG) and Expedia (EXPE) have had a rough few weeks. As Jim Cramer noted on Tuesday’s episode of Mad Money, the two were down 10% and 3%, respectively, since Meta Platforms (META) launched its Muse agent.
The worry is easy to follow. If an agent can shop around and book for you, who needs a travel site?
But on Thursday’s episode of CNBC’s Squawk Pod, Airbnb (ABNB) CEO Brian Chesky said something that points the AI risk at a different company entirely:
“ChatGPT has really helped Airbnb. A lot of the traffic that comes to Airbnb from ChatGPT converts better than traffic at Google.”
If you own Alphabet (GOOG), that’s a rough thing to hear from a travel CEO.
Why “converts better” stings
Here, a visitor who “converts” is one who actually books.
Conversion is what Google sells. Advertisers bid on search clicks based on how often those clicks turn into sales. Travel searches come from people who are about to spend real money, so advertisers pay up for them.
Chesky is saying ChatGPT’s visitors are even readier to book.
My guess is that it comes down to what happens before the click. Someone who types “beach rental” into Google still has all the narrowing down ahead of them. Someone who has spent ten minutes telling ChatGPT they need four bedrooms, a fenced yard for the dog, and a short walk to the sand has done that work before they ever reach Airbnb. The same goes for a group of friends who need six beds within ten minutes of a wedding venue.
Which visitor would you rather pay for?
Chesky doesn’t even think chatbots are good at shopping yet. “Chatbots are not good for shopping,” he said, comparing today’s setup to “taking a jet engine and putting on the back of a bicycle.” To book a stay, “you want rich features. You want lots of photos. You want comparison tools. You want filters.”
So the chatbot hands the customer to Airbnb to finish the booking. That’s the job Google Search does today. For Airbnb, at least, ChatGPT is apparently doing it better, and no agent books anything on its own.
Dig into Google Cloud’s growth and margins with 10 years of segment data on TIK (It’s free) >>>
Wall Street isn’t worried yet
You wouldn’t know any of this from the estimates. Analysts expect Alphabet’s revenue to climb from $403 billion in 2025 to $736 billion by 2028, with annual growth staying between roughly 20% and 24%.
I don’t expect one CEO’s remark to move those estimates. If this risk shows up, it will show up slowly, as advertisers pay a little less for each search click.
Alphabet’s margins look just as healthy. Its operating margin dipped to 26.5% in 2022 and has been back around 32% for the last two years…
In my view, that margin depends on advertisers paying a premium for high-intent clicks, and travel clicks are a prime example.
The stock isn’t priced for much trouble either. Alphabet trades at 24.4 times forward earnings, slightly above its three-year average of 23.3x and well above the 16.4x low it hit in April 2025.
See how AI-driven margin gains could shift Airbnb’s fair value (It’s free) >>>
Isn’t this one anecdote?
It’s a fair question. “A lot of the traffic” isn’t a number, and Airbnb is one website. Chesky didn’t say how many visitors ChatGPT sends Airbnb, but it’s a safe bet that’s a small fraction of what Google sends. Better conversion on a small stream of visitors doesn’t cost Alphabet much today.
Here’s the thing, though: an advertiser pays for a click based on what it’s worth next to the other options. Each time a travel site finds a channel that turns visitors into bookings more often, Google’s clicks look a little pricier by comparison. That gives advertisers leverage over Google, and the leverage grows as chatbot traffic grows.
Chesky himself sees “a scenario where traffic that comes from agents could be really good for Airbnb.” I’d expect travel sites to follow that traffic wherever it goes.
The upshot
So yes, I think this is a real problem for Alphabet, even if it’s still a quiet one. Google’s advantage has always been that people using Search are already close to buying something. Chesky says ChatGPT users are even more likely to book, and they’re getting there through a tool he doesn’t even think is very good at shopping yet. If that keeps up, Google could have a harder time charging as much for those high-intent clicks, and that risk is here before AI agents ever start booking trips on their own.
Of course, Alphabet has its own chatbot in Gemini. If the best-converting referrals end up coming from Google’s own chatbot, Alphabet keeps the customer. The next few quarters of search ad pricing will say a lot.
So what is Alphabet stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Alphabet could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
