MW Expedia is treating AI as a friend rather a mortal enemy, and its stock is soaring

By Tomi Kilgore

The online travel platform's rallied to a record as it has embraced AI to help boost earnings, even as some worry about what the technology means for the future of its business

Expedia's stock soared to a record close as the online travel agent has embraced AI to help boost business, rather than try to find ways to beat it.

Expedia Group Inc. is a good example of how it can sometimes be better to embrace the devil you know, rather than keep trying to find ways to defeat it.

One of Wall Street's biggest worries about the future of online travel agencies is that artificial-intelligence technology will allowing travelers to bypass them when making plans.

But rather than try to beat AI, Expedia Group Inc. (EXPE) Chief Executive Ariane Gorin has decided to embrace it. The term was used in a positive way nearly two dozen times during the company's conference call with analysts that followed its third-quarter results Thursday.

It's working, as Melius Research analyst Conor Cunningham noted that the company - which owns the travel sites Expedia, Vrbo and Hotels.com - has now strung together several quarters of accelerating growth and improved profitability. Granted, there has also been a broad-based recovery in travel trends since July as uncertainties surrounding tariffs have moderated, but Expedia's stock has far outpaced shares of rival Booking Holdings Inc. (BKNG), whose subsidiaries include Priceline.com, Kayak and OpenTable.

Expedia's stock soared 17.6% Friday, to a record-high close of $258.25. It has run up 37.7% over the past three months, while Booking shares have shed 9.1% and the S&P 500 index SPX has tacked on 6.1%.

Expedia reported third-quarter bookings that rose 11.7% from a year ago to $30.73 billion, well above the average analyst estimate compiled by FactSet of $29.11 billion. The margin of that beat was the widest since the second quarter of 2021, according to FactSet data.

The company also beat third-quarter profit and revenue expectations, and raised its outlook for the year.

Read: Expedia says people are still making travel plans - and it's not just the wealthy.

CEO Gorin said AI was a key driver in the company's strong performance, as it has helped advance its strategic priorities - which include increasing customer value, and the growth of its business-to-business and air-travel offerings.

"Since the beginning of the year, we've integrated AI into our products at key moments that matter, from AI filters to property Q&A, guest-review summaries, and our service agent," Gorin said, according to an AlphaSense transcript of the conference call. "And these features are driving engagement and getting even more effective with time."

Since the end of May 2024, which was the month Gorin became CEO, Expedia's stock has soared 128.8%, while Booking shares has advanced 30.8% over the same time frame.

Gorin said the company was also using AI to make advertising more relevant. And rather than discourage its customers from using AI, Gorin said Expedia is working to take advantage by "moving fast and deliberately to ensure our brands show up wherever travelers are."

Expedia has partnered with AI agents like Google $(GOOGL)$ $(GOOG)$, OpenAI and Perplexity to remain relevant in places where people are searching about travel plans, Melius Research's Cunningham noted. He said Wall Street may have concerns over the long-term consequences of how travel search has shifted to AI, but at least for now, investors shouldn't ignore that it's helping grow the business.

"[W]e understand there is likely to be a bit of an overhang given the debate around [online travel agent] disintermediation via AI, but the earnings beat and raise here should not be ignored," Cunningham wrote in a note to clients.

The Melius analyst kept his stock-price target intact at $262 - but of the 38 other analysts surveyed by FactSet who cover Expedia, no less than 17 raised their targets.

-Tomi Kilgore

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November 07, 2025 17:04 ET (22:04 GMT)

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