Just noticed something interesting about Booking Holdings that most people seem to be missing right now. The company announced a 25-to-1 stock split back in February, but instead of rallying like split stocks typically do, shares have actually dropped over 5% since the announcement. Weird, right?

The reason? A lot of investors are freaking out about AI. They're worried that AI chatbots could completely disrupt Booking's core travel booking business. It's a fair concern on the surface, but I think the market is overreacting here.

Here's why I'm not buying the disruption narrative. Booking has built something that's incredibly hard to replicate: a massive global network of 4.4 million properties across 220 countries. A huge chunk of these are independent boutique hotels that depend on Booking for their bookings and marketing. You can't just build that overnight with an AI chatbot. It takes years.

Beyond that, Booking has been smart about integrating AI into its actual platform rather than fighting it. They've rolled out natural-language search tools to help customers plan trips more intuitively. They're also pushing their Connected Trip strategy, which lets customers book flights, hotels, rental cars, and activities all in one place. Transactions involving multiple trip components grew in the high 20% range last year, which shows real customer stickiness.

The data advantage is another thing people underestimate. Booking has decades of customer booking data plus information from all those property operators. That's first-party data that a generic AI tool just doesn't have. It means Booking can deliver a way better AI-powered experience than some standalone chatbot could.

Now here's where the valuation gets interesting. The company just delivered 13% revenue growth in 2025 with an 8% increase in room nights. More importantly, their cost-cutting program from late 2024 is actually working. Bottom-line earnings grew 20% last year, and when you factor in share buybacks, earnings per share jumped 22%. Management is guiding for 15% EPS growth going forward, and they're planning to reinvest the cost savings into AI, international expansion, and growing their OpenTable restaurant reservation platform.

The stock is trading at a forward P/E of around 14. For a company with double-digit growth and expanding margins, that's genuinely cheap. The PEG ratio is under 1, which is the kind of metric that usually makes value investors sit up and pay attention.

Look, I get why people are nervous about AI disruption. But Booking's competitive moat is real, and the stock price doesn't seem to reflect what the company is actually delivering. At these levels, especially after the stock split announcement, it looks like a legitimate opportunity if you're looking for exposure to travel and hospitality through a company that's actually executing well. The market seems to be pricing in some catastrophic scenario that I just don't see happening.