1 Artificial Intelligence (AI) Stock Investors Are Overlooking That Could Be Worth Buying

Core Insights - Airbnb has leveraged artificial intelligence (AI) to connect landlords and tenants, enhancing its market presence despite not owning properties [1][3] - The company has faced sluggish demand and competition, impacting stock price growth since its IPO in December 2020 [2][6] - Despite challenges, Airbnb's property network and customer base continue to expand, indicating potential for future stock performance improvements [2] AI Utilization - Airbnb employs AI for various functions, including property pricing, tenant risk assessment, and market trend monitoring [4] - The company has integrated generative AI into its chatbot and acquired GamePlanner AI to enhance customer interactions [5] Competitive Landscape - Airbnb's AI capabilities provide a competitive edge over rivals like Expedia's Vrbo, which has not developed similar technology [6] - Increased competition from hotel chains and an oversupply of short-term rentals are straining Airbnb's business model [7] Financial Performance - In the first nine months of 2024, Airbnb reported $8.6 billion in revenue, a 12$2.2 billion, significantly lower than the $5.1 billion profit in 2023, primarily due to a one-time tax benefit in 2023 [8] Valuation Metrics - The removal of the 2023 tax benefit has led to a spike in Airbnb's price-to-earnings (P/E) ratio to 45, but anticipated net income growth brings the forward P/E ratio down to 30 [9] - The declining valuation may present an attractive opportunity for investors as the market awaits improvements from AI and other trends [9] Investment Considerations - Given the current state of Airbnb's business and its attractive valuation, it may be a favorable time for investors to consider accumulating shares [10] - The company has fundamentally transformed the short-term rental market, providing unique experiences for both landlords and tenants [12][13]