Software stocks have been taking a beating in 2026, with some experiencing overnight drops of up to 20%. The main concern among investors is the potential disruption that artificial intelligence (AI) could bring to existing software vendor relationships. The fear is that AI could enable companies to quickly create custom-built software, known as “vibe coding,” in a matter of hours.
One such stock that has seen a rapid decline in recent weeks is Wix.com (NASDAQ: WIX). The website-building platform has seen its shares fall below $70 and its market value drop to just $3.8 billion. However, I believe this downward trend is unwarranted and could set Wix up for significant returns over the next decade.
Wix is a low-code website builder that caters to non-technical individuals, such as small business owners and freelancers, looking to establish an online presence. While the bear case against Wix suggests that AI chatbots could make it easy for individuals to build their own websites, it fails to acknowledge that Wix already offers tools and AI capabilities to simplify the website-building process for its users.
In fact, Wix is leveraging AI advancements to enhance its products and make it even easier for people to create an online presence. Additionally, the company’s acquisition of Base44, a prompt-based mobile app builder, is expected to drive significant revenue growth. With Base44’s annual recurring revenue projected to reach $50 million in 2025, up from under $1 million at the time of acquisition, Wix is well-positioned to capitalize on the growing demand for online platforms.
Despite concerns about AI’s impact on the software industry, Wix’s financial performance remains strong. The company reported a 14% year-over-year revenue increase in the last quarter, reaching $500 million, with expectations of generating $600 million in free cash flow in 2025. This consistent growth, coupled with Wix’s affordable stock price, makes it an attractive investment opportunity.
At a market cap of $3.8 billion, Wix is trading at just 6.3 times its 2025 free cash flow guidance. Furthermore, the company recently announced a $2 billion share repurchase program, which could significantly reduce shares outstanding and boost shareholder returns in the coming years.
In conclusion, Wix’s resilient growth in website and app development, coupled with its undervalued stock price, make it a compelling investment opportunity. Despite the current market turbulence surrounding software stocks and AI technology, Wix’s strong financial performance and strategic acquisitions position it as a potential winner in the AI-driven software landscape.
