Unlocking The Future: Airbnb's Latest Acquisition of An AI Startup Sparks Investor Excitement

Airbnb Inc. ABNB is one of the most popular companies in the hospitality sector, disrupting the hotel industry since its inception in 2007. The company was valued at nearly $103 billion during its stock market listing in 2020, making it one of the most successful initial public offerings (IPO) in history. 

Shares of Airbnb have surged over 59% over the past year, outperforming the tech-focused Nasdaq Composite's 43.4% returns over the period. Airbnb joined the benchmark S&P 500 index in September. 

Strong Financials

Pent-up travel demand has driven Airbnb's financials in the last quarter, as the company's revenue grew 18% year-over-year to $3.4 billion in the fiscal third quarter, which ended Sept. 30. 

Airbnb Chairman and CEO Brian Chesky claimed the last quarter to be "a record travel season for Airbnb" during the quarterly earnings call, as the company's supply increased by nearly 19% year over year, adding approximately 1 million active listings. 

Airbnb's net income amounted to $4.4 billion during the quarter, indicating a rise of over 266% year over year. Earnings per share (EPS) rose by more than 281% from the same period last year to $6.83. 

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AI Integration 

Airbnb acquired GamePlanner.AI for approximately $200 million in November, marking its first acquisition as a publicly traded company. 

GamePlanner.AI was cofounded by Adam Cheyer, who played a key role in the development of Siri in 2020. The startup had operated in stealth mode to safeguard intellectual property since its inception. 

GamePlanner.AI is set to expedite certain artificial intelligence (AI) projects for Airbnb, as the generative AI platform is expected to serve as a travel concierge. 

Chesky envisions a transformative impact on the platform through generative AI, as he aims to use the technology to evolve with users, learning about their preferences over time and elevating their travel experiences. This could involve personalized matches between users and suitable rooms or homes.

"What makes GamePlanner.AI so special is that they combine expertise in AI, design and community," Chesky said in a press release. "AI will rapidly alter our world more than any other technology in our lifetime, but we need to ensure that it augments humanity in a positive way. Airbnb is one of the more humanistic companies in technology, and I believe that, together with Adam and his team, we can develop some of the best interfaces and practical applications for AI."

Robust Growth Prospects 

Analysts expect Airbnb's revenue to amount to $2.16 billion in the fiscal fourth quarter ending in December, indicating a 13.5% improvement year over year. The company's annual revenue is expected to amount to $9.85 billion for fiscal 2023, reflecting a 17.3% rise from the same period last year. 

Wall Street is bullish regarding Airbnb's bottom-line growth as well. The consensus EPS estimate of $0.67 in the current quarter indicates an over 39% growth year-over-year. In addition, analysts expect the company's annual EPS to surge by 189.6% from the same period last year to $8.08 in fiscal 2023.

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