As travelers swoon over cozy caves and tiny homes, Airbnb makes a big move onto the S&P 500. That has Airbnb stock booking a spot on the IBD Breakout Stocks Index as the 2020 IPO takes aim at a new buy point in a stormy market.
Before the market opened on Monday, Airbnb joined the S&P 500, along with private-equity behemoth Blackstone. In anticipation of the change, both new additions to the benchmark index saw a huge influx of volume on Friday. Airbnb stock traded nearly 75 million shares that day, 948% higher than normal.
Airbnb has also reserved a room on the IBD Big Cap 20. With a 98 Composite Rating, the company occupies the penthouse suite within the travel booking industry group. Other highly rated industry peers include Booking Holdings and MakeMyTrip, both members of the IBD 50.
The group ranks a solid No. 37 out of the 197 industries IBD tracks.
See Who Joins Airbnb On The IBD Breakout Stocks Index
A+ Investors Get On Board With Airbnb And Its AI Moves
Founded in 2008, Airbnb went public in December 2020 — just as the Covid-19 pandemic hit. Global lockdowns and travel bans weighed on Airbnb stock through the end of last year, when ABNB found a bottom and began to rebound.
The San Francisco-based marketplace for travel info and booking services has grown to over 4 million hosts, who have welcomed more than 1.5 billion guest arrivals in almost every country across the globe.
A new report from Airbnb revealed the most sought-after Design Category listing so far this year. Cozy caves and tiny homes topped the list.
As travelers get comfy in cute digs, Airbnb continues to embrace artificial intelligence to corral and expand growth. On Sept. 11, the company announced that James Maynika — one of the world's leading AI experts — will join its Board of Directors. Earlier this year on Bloomberg Live, Airbnb CEO Brian Chesky discussed the opportunities the company sees to incorporate artificial intelligence across its platforms, including using AI to enhance the matching of hosts and travelers.
On Aug. 3, Airbnb posted solid Q2 results, delivering 98 cents a share in earnings, a 75% gain over the prior-year quarter. Sales rose 18% to $2.48 billion. But top-line growth remains a concern, with sales increases slowing for the sixth-straight quarter.
Yet, 21 funds with an A+ or A rating from IBD own shares in Airbnb stock. In IBD Stock Checkup, the company earns an A SMR Rating, boosted by low debt and a 24% annual pretax profit margin and 37% annual return on equity.
Airbnb Stock Gets A Handle On S&P 500 Volume
On Sept. 5, ABNB stock gapped up on news it would join the S&P 500 index on Sept. 18. The stock continued to rise until pulling back to form a handle. Despite the pullback, Airbnb has managed to hold support above its 50-day moving average.
The handle creates a potential buy point of 151.16. The new cup with handle is early stage, which is positive. But selling pressure in the market indexes, which has pushed the Nasdaq and S&P 500 below their 50-day lines, calls for caution. As the market works through its current convulsions, look for the relative strength line for Airbnb stock to turn upward to confirm market leadership.
As Airbnb continues to work on its handle, BKNG stock crafts a 325.71 buy point in an early stage flat base, testing support at its 21-day exponential moving average. Industry peer MMYT stock is extended from an earlier breakout and is also testing that line.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
