Wix stock soared 60% in August on AI growth

Wix's August surge marks a sharp reversal in investor sentiment. Earlier in the year, the market punished the stock on fears that generative AI would undermine its website-building business, helping push shares from near $200 last September to under $50 by the end of July. The company's latest earnings did not show the expected damage; instead, all segments grew at double-digit rates, and Base44, its new AI application builder, nearly doubled its annual recurring revenue to $200 million within five months.

A key factor in the changed outlook is Base44's margin trajectory. Management said the product should reach 60% gross margins, up from roughly zero at the start of the year. This improvement, combined with the legacy business's strong margins, suggests Wix could return to solid profitability and free cash flow over time, even though heavy investment in Base44 and the new AI website builder Wix Harmony made the company unprofitable in 2026.

The stock's current valuation may still offer upside if revenue growth continues. With revenue of $2.1 billion over the last twelve months, a sustained 15% growth rate would put sales above $3 billion in three years. If profit margins can expand to 20%, the article estimates $600 million in annual earnings power, or just 6 times its current market cap. For patient investors, the risk-reward at this price could be favorable, though the stock remains down 75% from its 2021 highs.