Key Highlights
- Wedbush Securities increased its price target for WIX from $55 to $80 while maintaining a Neutral rating
- Base1, Wix’s proprietary large language model, went live in June 2026, with Base44 non-GAAP gross margins projected to hit approximately 60% during 2H26
- The Partner Program delivered 17% revenue expansion compared to the prior year in Q2
- Company leadership intends to channel AI-driven cost efficiencies into expanded sales and marketing initiatives
- Wedbush adjusted its Q3 revenue forecast slightly lower to $567M while increasing the GAAP gross profit projection to $380M
Shares of Wix.com (WIX) received a lift following Wedbush’s decision to increase its price objective to $80 from $55, a move prompted by the company’s recent financial performance demonstrating enhanced gross margins and steady expansion in its Partner Program segment.
According to Wedbush analyst Ygal Arounian, the Base44 platform operated by Wix is on track to achieve a non-GAAP gross margin of roughly 60% during the latter half of 2026. This marks a dramatic improvement from levels close to zero at the beginning of the year. The enhancement is anticipated to contribute approximately 2 percentage points to overall non-GAAP gross margins when comparing the second half to the first half of the year.
The company introduced Base1, its proprietary trained large language model, in June 2026. Company executives indicated that substantial traffic volumes are now being processed through non-frontier model infrastructure, which has been instrumental in reducing operational costs.
Even with these margin improvements, Wedbush maintained its Neutral stance on the equity. The firm increased its Q3 GAAP gross profit forecast to $380M from $370M while making a modest downward revision to its Q3 revenue projection, adjusting it to $567M from $569M.
Partner Program Delivers Strong 17% Annual Growth
The Partner Program at Wix achieved 17% revenue growth on a year-over-year basis during the second quarter. This initiative caters to agencies and independent professionals, offering advantages such as enhanced support services, revenue sharing arrangements, and client acquisition opportunities via the Wix Marketplace platform.
While certain partners reduced their engagement with Wix throughout Q2, presumably transitioning to alternative vibe-coding platforms, a significant number of others expanded their usage of Base44, which helped counterbalance the decline.
Company management indicated plans to redirect the cost reductions achieved through non-frontier AI model deployment into heightened sales and marketing efforts. The strategic objective is to drive greater adoption and demand for Base44 solutions.
AI Technology Advancement Fuels Market Confidence
Market sentiment strengthened after company leadership elevated its full-year projections for both revenue and free cash flow generation, citing strong appetite for its artificial intelligence capabilities and the Wix Studio offering. The revised guidance triggered elevated trading volumes in the shares.
The subscription-based revenue framework employed by Wix provides a more stable and predictable cash flow pattern. This financial foundation has enabled sustained capital allocation toward AI feature development and expanded business service offerings.
However, the organization maintains elevated debt obligations and operates with a negative shareholder equity position. Should customer retention rates deteriorate or AI infrastructure expenditures accelerate, this financial leverage could create headwinds for profitability.
WIX stock has declined 29% on a year-to-date basis, trading at a current market capitalization of $3.1 billion with typical daily trading volume averaging approximately 1.68 million shares.
The updated $80 price target from Wedbush reflects the firm’s reassessment in light of the Q2 financial performance and the enhanced margin trajectory outlook.
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