This episode explores Booking Holdings as a high-quality stock idea for Q2 2025, highlighting its surprising position as the world's largest travel company and a recent addition to Clay's portfolio. Against the backdrop of Booking's dominance in Europe and its formidable network effect, the discussion acknowledges competition from Expedia and Airbnb, as well as potential threats from AI. The hosts delve into Booking.com's business model, which acts as a middleman between travel service providers and travelers, generating revenue through agency and merchant models; Booking's success is attributed to its early adoption of the agency model in Europe, a fragmented market of independent hotels. More significantly, the discussion contrasts Booking's impressive ROIC and margins with those of Expedia, underscoring Booking's competitive advantages and efficient marketing. The hosts also explore Booking's competition with Airbnb in the alternative accommodations market, noting Booking's increasing market share and the importance of customer experience. The conversation then pivots to management incentives, the potential impact of AI, and key risks such as economic cyclicality and competition from Google, concluding with a valuation analysis that projects a 12-14% expected return for shareholders, driven by earnings growth and share buybacks.