Send me real-time posts from this site at my email
Motley Fool

Why Shares of Sabre Are Soaring Today

What happened

Shares of Sabre (NASDAQ: SABR) climbed more than 16% on Thursday thanks to a new partnership with Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) to expand the use of artificial intelligence (AI) in travel sales. Sabre's airline customers are having a good day as well, helping to boost enthusiasm about the company.

So what

Sabre is a former subsidiary of American Airlines Group that runs airline ticketing and reservation systems. The company has had a hard time of late in part because the coronavirus pandemic has gutted travel demand, but also in part because tech companies like Google have been cutting in on the ticketing business.

Image source: Getty Images.

The airlines are rallying on earnings results that indicate the industry can survive without bankruptcies. And Sabre and Google are finding ways to work together. The companies said they are developing an AI platform, known as Sabre Travel AI, aimed at helping customers get personalized content and to help travel providers boost revenue and margins. Sabre hopes to bring the product to market in early 2021.

Now what

Even after Thursday's rally, Sabre shares are down 65% for the year. There hasn't been a lot to get excited about for investors in airlines or the companies that rely on them for revenue. And with travel not expected to fully recover for years, it might be a long time before Sabre's core business returns to its pre-pandemic levels.

That said, Sabre's work on AI could be a big part of the reason the company is able to benefit once travel does return. For investors with a long-enough time horizon, the introduction of Sabre Travel AI is undoubtedly good news. In a tough year for the business, investors finally got something to get excited about on Thursday.

10 stocks we like better than Sabre
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Sabre wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of October 20, 2020

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue