Airbnb stock extended their slide this week, dropping to $149.58, their lowest level since August 6. The stock is now down 23% from last month’s peak as investors grow increasingly worried about the potential impact of Meta Platforms’ Muse on Airbnb’s business.
Airbnb stock falls amid Muse disruption fears
Airbnb and other travel stocks have plunged this week as investors turned their focus to Muse, the new AI agent platform by Meta Platforms. Booking Holdings plunged to $155, down by 29% from its highest point in August. TripAdvisor plunged to a record low, while Expedia moved to $259, its lowest level since July 24.
Investors are concerned that Airbnb’s business will be disrupted by AI agents. Muse, for example, can crawl the internet, find cheap longing locations, and even book for a user. As such, the fear is that this approach will disrupt a company like Airbnb, which depends on people using its platform to find vacation rentals.
These fears are real. However, in the past, we have seen investors overreact whenever a new technology comes in. A good example of this is in the software industry, where most companies, including Salesforce, ServiceNow, and Atlassian plunged amid SaaSpocalypse fears. Today, most of these stocks have rebounded by double digits from their yearly lows.
The same happened with wealth management stocks like Raymond James, London Stock Exchange, and Charles Schwab, which dropped substantially after Anthropic launched financial tools. These stocks have also rebounded.
Therefore, there is a likelihood that the companies will bounce back once the fear among market participants fade.
Airbnb’s business is doing well despite risks
Airbnb’s business has continued doing well despite the rising risks. One of the risk is that inflation has remained at an elevated level amid the US-Iran war.
The most recent results showed that its revenue jumped by 17% in the second quarter to $3.6 billion, with the net income hitting $816 million. This growth has helped the management to continue repurchasing its shares. It repurchased $1.1 billion in the last quarter, with its outstanding shares falling to 634 million from 673 million in 2024.
Airbnb also has a strong balance sheet with over $12.1 billion in cash and equivalents, and another $12.2 billion held for its guests. These assets are substantial considering that it has just $2.4 billion in long-term debt.
ABNB stock price technical analysis
Airbnb stock chart | Source: TradingView
The daily chart shows that the ABNB stock has slumped in the past few weeks and the sell-off gained steam this week as Muse gained momentum. It has dropped from $193 in August to the current $149.58.
The stock has plunged below the support level of $156.51, its highest level on July 29. Moving below that level confirmed the bearish outlook.
On the positive side, it has remained above the 200-day Exponential Moving Average and the ascending trendline that links the lowest levels since February.
Therefore, the stock may will remain under pressure in the near term and then crawl back in the fourth quarter. This is in line with what most analysts predict. RBC Capital has maintained a target of $195, while Citizens hiked from $190 to $200. Other highly bullish analysts are from companies like Morgan Stanley, Raymond James, Baird, and DA Davidson.
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