GoDaddy (GDDY) is likely to see higher level of risk due to its transition to agentic web building and vibe coding amid an evolving competitive environment, with limited margin upside in the next few years, Wedbush said in a Monday note.
The company posted Q2 results that are mainly in line with expectations but cut the top end of its full-year revenue guidance, while Applications and Commerce bookings are seen in the high single-digits for the rest of the year, according to the note.
The key takeaway from the quarter's commentary is that more customers are buying domains and create websites from within large language models, and GoDaddy has responded by fast-tracking the roll-out of its agentic operating system for small businesses Airo and integrating capabilities, such as commerce.
The company is also introducing a developer program that includes domain APIs that can plug into and capture demand inside large language models, Wedbush analysts said.
GoDaddy has committed to maintaining the expected margins despite the move to agentic web building and vibe coding, which is implicitly a lower gross margin product in the near term, the analysts said.
Wedbush maintained the company's stock rating at outperform and lowered the price target to $93 from $109.
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