Just been looking at Booking Holdings and there's something interesting happening here that most investors might be sleeping on right now.

Back in February, the company announced a 25-to-1 stock split, which usually signals management confidence in future growth. Data from Bank of America shows that stocks tend to return around 18.3% in the year following a split announcement versus 13.3% for the S&P 500. But BKNG actually went the opposite direction - down more than 5% since the announcement. Why? Everyone's freaking out about AI disrupting their booking business.

Here's the thing though. The AI narrative is probably overblown. Booking has a moat that's way harder to replicate than people think. They've got 4.4 million properties across 220 countries on their platform. That's not something a chatbot competitor builds overnight. These are mostly independent hotels and vacation rentals that depend on Booking for distribution. Building that network takes years.

Beyond accommodations, they're expanding into flights, rental cars, tours, activities, and restaurant reservations through OpenTable. Their Connected Trip strategy - where customers book multiple parts of a trip together - grew in the high 20% range last year. That's serious customer stickiness and horizontal integration that AI alone can't disrupt.

The financial picture is actually solid. Revenue grew 13% in 2025 with an 8% increase in room nights. More importantly, their cost-cutting program from late 2024 is working - bottom-line growth hit 20% for the year. They're buying back shares aggressively, which pushed EPS growth to 22%. Management expects this momentum to continue and is targeting 15% EPS growth going forward while still investing in AI, Connected Trips, and expanding into Asia.

And here's where it gets interesting - the valuation looks unbelievably cheap right now. Forward P/E is sitting around 14, and the PEG ratio is under 1. At that price, you're basically pricing in a complete collapse in their earnings power. That seems unlikely given their data advantage, supply network, and brand strength.

I'm not saying this is guaranteed to moon, but for investors looking for cheap stocks to buy now with actual fundamentals behind them, BKNG at these levels looks like one worth considering. The market's probably overreacting to AI fears while missing the real competitive advantages here.