Airbnb shares gain as investors cheer revenue forecast raise, AI payoff

Meanwhile, Airbnb also highlighted its success in using AI tools after the rise of the technology had sparked fears of disruptions to traditional travel firms. Earlier this week, Booking BKNG.O noted that it was seeing a positive return on its AI investments.

"AI is the best thing to ever happen to Airbnb," CEO Brian Chesky said on a post-earnings call.

Company executives noted that customer support costs per booking declined about 16% year-over-year, driven in part by improvements to its AI assistant.

Needham analysts noted Airbnb has been rebuilding itself to move faster with AI, while Wedbush said such initiatives were speeding up product launch cadence and driving cost efficiencies.

Airbnb reported second-quarter revenue of $3.61 billion, beating estimates of $3.57 billion, according to data compiled by LSEG.

D.A. Davidson analysts dubbed Airbnb the "best-positioned online travel agency" to weather regional geopolitical turmoil, an inflationary environment and AI traffic risks, citing its sizable U.S. revenue exposure and wide variety of lodging types and geographic listings breadth.

In addition to building out services and experiences, Airbnb is growing hotel supply, such that room nights grew at three times the rate of homes. Morningstar analyst Dan Wasiolek said these verticals could add billions in incremental bookings through the end of the decade.

Airbnb shares rose 9% in premarket trading on Friday as the vacation-rental firm's raised annual revenue forecast eased worries over the fallout on global travel demand from the conflict in the Middle East.

As the war in Iran enters its sixth month, hotel operators and online travel agencies are banking on steady leisure demand and a host of upcoming international sporting events to help offset any likely impact.