Booking (BKNG) is positioned to remain a "key driver" of the industry even as "agentic" artificial intelligence tools evolve, Morgan Stanley said in a report emailed Tuesday.

The investment bank said Booking is expected to continue owning the customer relationship, capturing traveler data and using it to "drive high-margin direct business." Agentic platforms will still require access to Booking's extensive travel inventory, providing the company with structural leverage, according to the report.

While generative AI is likely to introduce new products and alter user behavior in online travel, early agentic offerings have largely redirected traffic to online travel agencies' apps and websites rather than enabling "in-agent checkout," the report said, adding that major platforms such as Alphabet's (GOOG, GOOGL) Google have indicated they do not intend to become the "merchant of record," avoiding payment risk and customer service responsibilities.

Morgan Stanley has upgraded Booking to overweight from equalweight and adjusted its price target to $5,500 from $6,150, adding that the company's 20-year history of navigating shifts in search and advertising positions it to maintain its dominance in an AI-driven landscape.

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