Shares of Wix.com (WIX -1.91%) zoomed over 60% in August, according to data from S&P Global Market Intelligence. The website-building platform was considered an artificial intelligence (AI) loser earlier this year, but that narrative completely reversed this summer, with the company posting solid revenue growth and major margin improvement for its new AI-generative application builder.
Here's why Wix stock was up in August, and whether it is a buy now.
NASDAQ: WIX
Key Data Points
Software rebound
The catalyst for Wix's massive move last month was its earnings report at the beginning of the month. Investors had beaten down Wix, sending shares from close to $200 in September of last year to under $50 by the end of July, on the theory that Wix's website-building platform would lose out to new generative AI tools.
So far, Wix's earnings do not show any signs of AI fatigue. Revenue was up 15% year-over-year last quarter to $563.1 million, with all segments growing in the double digits. Importantly, management said its new and fast-growing application builder, called Base44, should reach 60% gross margins, compared to around 0% at the start of the year.
Later in the month, Wix management confirmed that Base44 had surpassed $200 million in annual recurring revenue (ARR), up from $100 million five months ago. This makes Base44 one of the fastest-growing AI businesses in the world, and could prove a great asset for Wix in the years ahead.
Image source: Getty Images.
Still time to buy?
After jumping in August, Wix now trades at a $3.6 billion market cap. It repurchased $1.6 billion worth of its outstanding shares in the Spring in a tender offer, which has aggresively brought down its share count, with the stock still down 75% from highs set back in 2021.
Wix became unprofitable in 2026 due to major investments in growing Base44 and its new homegrown AI website builder, Wix Harmony. However, in the long term, the high gross margins of Wix's legacy business and the improving gross margins of its AI segments should lead to solid profitability and free cash flow.
Over the last twelve months, Wix's revenue was $2.1 billion. If revenue can keep growing at 15%, it will be over $3 billion three years from now. Assuming bottom-line profit margins can expand to 20%, that is $600 million in annual earnings power, or just 6x its current market cap.
For those with a multi-year time horizon, Wix stock still looks cheap today.
