Wall Street is losing confidence in GoDaddy’s AI strategy despite the company beating earnings estimates. GoDaddy reported quarterly earnings of $1.83 per share, exceeding consensus by $0.14, and revenue rose 7% year over year to roughly $1.30 billion, but the stock dropped 12% as investors focused on a slowdown in Applications and Commerce bookings growth to 7% from 9% in the prior quarter. Wells Fargo analyst Alec Brondolo attributed the deceleration to growing consumer demand for agentic AI products, while management accelerates its Airo AI platform and reduces investment in legacy offerings, a transition Brondolo warned will remain noisy through the second half of 2026 and into 2027. William Blair analyst Arjun Bhatia downgraded the stock from Outperform to Market Perform, and Piper Sandler maintained its Neutral rating, citing no clear catalyst for revenue growth to reaccelerate. The company guided third-quarter revenue to between $1.32 billion and $1.34 billion. On the bullish side, Airo’s annualized bookings run rate surged fivefold in a single quarter to $50 million, normalized EBITDA margin expanded more than 200 basis points to 33%, free cash flow reached $443 million, and GoDaddy repurchased $852 million in shares year to date, lowering its share count by 7%. Hedge fund holdings fell from $1.98 billion to $1.26 billion, with the number of funds holding the stock dropping to 45 from 57, and short interest stands at 6.68%.
Piper Sandler Companies
Wells Fargo & CompanyGodaddy IncInvestors worry about AI transition slowing bookings growth despite earnings beat.
