11:53 AM EDT, 07/30/2025 (MT Newswires) -- Booking Holdings' ( BKNG ) alternative accommodation business continued to perform in Q2, while its US segment remained the "slowest growing region," Morgan Stanley said in a Wednesday note.

The company reported fiscal Q2 adjusted net income late Tuesday of $55.40 per diluted share, up from $41.90 a year earlier, as revenue rose to $6.80 billion from $5.86 billion. Booking Holdings ( BKNG ) also guided for Q3 revenue growth of 7% to 9%.

The Q2 results and Q3 guidance were "solid," said Morgan Stanley, noting that the company's alternative accommodation business drove about 50% of room night growth in Q2. The firm also cited a 10% annual increase in Q2 advertising spend, supported by continued strong returns on ad investments.

Low-single-digit growth in the US, however, was "underwhelming" and that segment continues to face macroeconomic headwinds, Morgan Stanley said.

The brokerage said Booking Holdings ( BKNG ) continues to execute well but flagged longer-term uncertainty around generative AI as a potential risk to valuation multiples

Morgan Stanley lowered its price target on Booking Holdings ( BKNG ) by 2.5% to $5,650 and reiterated its equal-weight rating.

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