Wix.com Ltd. (WIX)Wix.com Ltd. (WIX) * Web development software company based in Israel. * Stock has gained 130% over the past two years but is still down 55% from its 2021 peak. * Investing in AI efforts, but at a cautious pace. * Price target: $187.88, implying an 18.1% upside potential. GoDaddy Inc. (GDDY) * Major competitor to Wix in the web development space. * Betting big on generative AI through its AIro offering. * Stock has nearly doubled in the past year. * Price target: $148.60, implying a 6.4% upside potential. Rubrik, Inc. (RBRK) * Data management and cybersecurity company. * Uses Ruby AI assistant for breach prevention and mitigation. * Stock has fallen 22% since its IPO in April 2024. * Price target: $46.08, implying a 50.3% upside potential. Conclusion These three tech companies are actively embracing AI, but they are not yet recognized as pure-play AI players. Despite Strong Buy ratings from analysts, they may not reflect the full potential of their AI investments. Of the three, RBRK has the highest upside potential, according to analyst estimates.
As tech valuations continue to climb, it might be time to take a step back and consider some of the names that may have been (largely) left out of the recent AI-induced rise. Not everything has to benefit from AI right away to be a solid long-term buy. In this piece, we’ll look at three intriguing tech companies (WIX, GDDY, and RBRK) that have embraced AI, but likely won’t be recognized as AI players for a few years.
Each company has indeed been investing in AI efforts, but in a more cautious manner than some mega-cap tech titans who are more than willing to pour billions into AI with no guarantee of return. With analysts recommending Strong Buys, let’s take a look at WIX, GDDY, and RBRK using TipRanks’ comparison tool to see which name has the most potential.
Wix is an Israel-based web development software company that has gained remarkable momentum in recent years. Even after its latest 9% correction, shares of WIX are still up more than 130% over the past two years. That said, WIX stock is still down 55% from its early 2021 peak. As Wix continues to innovate in the field of AI technology, it may not be long before investors recognize Wix as an AI-first company. Regardless, the stock looks intriguing amid its latest dip, and I remain bullish even as the recovery path gets a bit rockier.
In a recent blow, Piper Sandler analyst Clarke Jeffries (not to be confused with investment firm Jefferies) downgraded WIX stock from Buy to Hold, largely due to valuation concerns. While Jeffries is encouraged by “AI-assisted design,” he thinks it’s too early to revise his growth expectations upwards again.
I don’t blame Jeffries for waiting to see how things would pan out with Wix and AI. But AI can move faster than analysts can keep up with their price target increases. AI will change web development, as new tools make it easier to create the beautiful digital storefronts of our dreams.
Of course, it will also take time before such new AI tools can be effectively monetized. But perhaps Wix’s new text-to-website conversational AI tool will have analysts asking for upgrades sooner rather than later. As with most impressive AI innovations, it is a profound technology that will only improve with time.
What is the price target of WIX Stock?
According to analysts, WIX stock is a Strong Buy, with 15 Buys and four Holds assigned in the last three months. The average WIX stock price target of $187.88 implies an upside potential of 18.1%.
GoDaddy is a major competitor to Wix in the web development scene. Like Wix, it’s betting big on the power of generative AI. And it’s this AI prowess that has seen GDDY stock rise like a coiled spring over the past eight months after a sideways slump for about five years. After nearly doubling (up 88% in the past year), I think it’s time to give GDDY a second look as investors seek out its hidden AI potential. All things considered, I’m bullish on GoDaddy.
Despite nearly doubling in a year, the stock is still dirt cheap at 11.6 times trailing price-to-earnings (P/E), well below the infrastructure software industry average of over 41 times. Indeed, GoDaddy has a track record as a registrar, web host, and mainstream website builder. As the company’s Airo AI offering (which helps users get up and running quickly) ramps up, I think there’s room for expansion in its valuation multiples.
Airo is not just an AI-powered website builder; it can automate several time-consuming tasks that small businesses need to perform to market themselves. Whether it’s Airo-powered social media content generation or digital advertising creation, Airo is showing that it can save companies time and money. GoDaddy reportedly sees generative AI tools saving small business owners $4,000 and 300 hours of work this year.
If Airo can be the AI product that can deliver such savings, I have no doubt that GoDaddy customers will be willing to pay for the toolset. In any case, GDDY’s price-to-earnings ratio doesn’t do Airo justice. Baird’s Vikram Kesavabhotla sees “more progress on Airo” as a potential catalyst for the stock in the second half of the year. As far as I’m concerned, he’s not wrong.
What is the target price for GDDY stock?
Analysts consider GDDY stock a strong buy, with ten buys and three holds in the past three months. The average GDDY stock price target of $148.60 implies an upside potential of 6.4%.
Rubrik is a data management and cybersecurity company whose shares hit the public markets in April 2024. It’s undoubtedly been a tough ride since peaking in late April. With the stock down some 22%, investors may be wondering whether the mid-cap ($5.5 billion) AI-delivering cybersecurity company is worth following as the stock hovers closer to its lows of $28 and change per share. After a strong first-quarter performance, I’m inclined to be optimistic, even if investors weren’t impressed.
With the company’s Ruby AI assistant, Rubrik may not only help companies prevent breaches, but also lessen the impact of the blow if it does occur. Indeed, it can cause quite a bit of panic once a cyberattack does occur.
For many companies that never saw it coming, it can be difficult to know what to do when time is running out. There’s no doubt that having an AI assistant like Ruby by your side will give you peace of mind for the money can buy when things get tough after a cyber threat has left its mark. With Ruby, Rubrik distinguishes itself as an AI-first cybersecurity company in an industry full of companies just getting on the AI train.
With demand for Rubrik’s software high, I think it makes sense to give the name a look at the dip as it goes for 7.7 times price-to-sales (P/S), which isn’t a high price to pay at all for a company that grew its revenue by 38% last quarter.
What is the price target for RBRK shares?
Analysts consider RBRK stock a strong buy, with thirteen unanimous buys in the past three months. RBRK’s average price target of $46.08 implies an upside potential of 50.3%.
The takeaway
These three AI innovators are not fully respected by investors at the moment. While it may be many quarters (or even years) before their AI products reflect current multiples, I think each name deserves more than a Strong Buy rating from the analyst community. Of the three, analysts see the most upside potential — as much as 50.3% — in RBRK stock.
Revelation
