Zillow Group (ZG) is positioned to outperform the market and its peers over the next several years despite investor concerns that AI may disrupt the real estate shopping process, RBC Capital Markets said Thursday in a report.

The risks to Zillow's monetization from AI tools remain low as large language model companies are unlikely to gain broad access to multiple listing service data, the report said.

Real estate still requires physical steps such as touring, financing, and working with an agent, the elements that reinforce Zillow's "durable moat" and are not easily replaced by AI, the report said.

Investors misread minor online traffic fluctuations, which were caused by Zillow's deliberate reduction of broad, low-value browsing content rather than any deterioration in user engagement, the report said.

AI currently drives less than an estimated 20% of Zillow's total search traffic, and only a major industrywide shift in AI capabilities would meaningfully affect the company's revenue, RBC said. Zillow is also improving its own AI tools, seen as an incremental positive, the report said.

RBC maintained its outperform rating on Zillow stock with a $95 price target.

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