Wix.com Ltd. (NASDAQ:WIX) was among the stocks Jim Cramer commented on, saying that tech stocks cannot be trusted to lead anymore. When a caller posed their inquiry about the company, Cramer said:
Okay, I got a guy, Zach, upstairs, and he can duplicate whatever Wix does, and he comes at a fraction of the cost, and they charge $10 a thing. Just kidding. And Zach’s worth a lot more than Wix.
Photo by Adam Nowakowski on Unsplash
Wix.com Ltd. (NASDAQ:WIX) provides a cloud-based web development platform with visual editing environments, application building tools, a user marketplace, and specialized business applications. The company also supplies integrated payment systems, mobile site management tools, and multiple artificial intelligence applications for automated content, design, and website creation. Lakehouse Capital stated the following regarding Wix.com Ltd. (NASDAQ:WIX) in its fourth quarter 2025 investor letter:
Wix.com Ltd. (NASDAQ:WIX) delivered another strong and consistent quarter, with bookings and revenue in constant currency both accelerating 13% year-over-year to $515 million and $504 million. Growth was supported not only by new users but also by higher-quality customers coming through Wix’s partner network who show stronger commercial intent, adopting higher subscription tiers and using more value-adding services such as payments. Underlying operating profit was broadly flat on the prior year as management reinvested in scaling the recently acquired Base44 business. Even with the reinvestment, free cash flow margins excluding acquisition-related transaction costs expanded 3 percentage points year-over-year to 32%, leaving the business comfortably above the Rule of 40 and trading at an attractive ~10 times 2026 free cash flow.
With the core business performing well, attention this quarter shifted to Base44, Wix’s newly acquired visual coding platform that enables users with limited or no coding experience to build standalone applications. Although visual coding has at times been flagged as a potential disruptor to website development tools like Wix, adoption to date has largely centred on application development rather than websites. In our view, the acquisition broadens Wix’s reach into the adjacent no-code application development category, complementing its core website-building offering.
Early traction has been encouraging. In less than six months under Wix’s ownership, Base44’s user base has grown sevenfold to more than 2 million users, and its annual recurring revenue has increased more than tenfold, with expectations of reaching about $50 million by the end of 2025. The product is already emerging as a category leader with more than 10% of audience traffic, and management has increased investment in marketing and AI compute capacity to support this momentum. This rapid uptake creates a short-term drag on margins, as users are mostly billed monthly while new cohorts consume more compute resources early in their usage cycle. While this may weigh on margins through 2026, investment levels remain within management’s control, and as Base44 scales alongside continued growth in Wix’s core business, we believe the company is well placed to return to margin expansion over time.
While we acknowledge the risk and potential of WIX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WIX and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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