Core Viewpoint - Wix's stock has experienced a significant decline due to fears that artificial intelligence (AI) could disrupt its business model, despite the company showing revenue growth [1][3][8] Company Performance - Wix's revenue increased by 14% year over year in Q3 2025, indicating ongoing business performance [3] - The stock has dropped nearly 80% from its all-time high in 2021, suggesting a substantial loss in market value [6] AI Impact - The rise of AI tools capable of building websites poses a threat to Wix, as these tools may lower switching costs for customers, making it easier for them to leave the platform [3][7] - Wix has responded to the AI trend by acquiring Base44, which enables app creation with AI and has shown promising user growth, with over 2 million users and 1,000 new paying subscribers daily [4] Competitive Landscape - Despite the acquisition of Base44, it remains uncertain whether Wix can maintain meaningful switching costs or a competitive advantage in the face of numerous similar tools available in the market [5][8] - The competitive landscape is rapidly changing, and while Wix has a profitable business model, the sustainability of its earnings is in question as AI capabilities improve [7][8] Valuation - Wix's stock appears cheap based on adjusted earnings, with an expected adjusted earnings per share of $6.73 for fiscal 2025, resulting in a price-to-earnings ratio of 11 [6] - Investors are advised to exercise caution despite the attractive valuation due to high uncertainty surrounding the company's future earnings [7][8]

Core Viewpoint - Diamond Hill Capital's "Large Cap Fund" reported a cautious stance on AI-driven market enthusiasm while highlighting the potential of fundamentally stable, high-quality, cash-generative businesses [1] Group 1: Market Performance - In Q4 2025, the Russell 1000 Value Index increased by 3.8%, with the information technology sector rising by 11% and communication services by 9%, driven by AI optimism [1] - The Fund returned 1.41% in Q4, underperforming the Russell 1000 Value Index [1] Group 2: Wix.com Ltd. Investment - Wix.com Ltd. (NASDAQ:WIX) was highlighted as a new addition to the Fund, with a market capitalization of $4.628 billion [2] - Wix.com Ltd. stock closed at $83.10 per share on February 2, 2026, with a -17.93% return in the past month and a 63.46% decline over the past twelve months [2] - The Fund initiated a position in Wix.com Ltd. due to concerns surrounding Generative AI, which the company believes are misplaced, citing its core capabilities and strong partner ecosystem [3] Group 3: Hedge Fund Interest - Wix.com Ltd. was held by 71 hedge fund portfolios at the end of Q3 2025, an increase from 42 in the previous quarter [4] - Despite acknowledging Wix.com Ltd.'s potential, the Fund believes certain AI stocks offer greater upside potential and less downside risk [4]

Core Viewpoint - Wix.com (WIX) has experienced a significant decline in stock price, underperforming compared to major indices, and is facing a challenging earnings outlook with a predicted decline in EPS for the upcoming quarter [1][2][3]. Company Performance - Wix.com ended the recent trading session at $86.83, reflecting a -3.49% change from the previous day's closing price [1]. - Over the past month, shares of Wix.com have lost 13.4%, while the Computer and Technology sector gained 1.51% and the S&P 500 gained 0.89% [2]. - The upcoming financial results are expected to show an EPS of $1.36, indicating a 29.53% decline compared to the same quarter last year, with revenue projected at $528.03 million, up 14.68% from the prior-year quarter [3]. Annual Estimates - For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.76 per share and revenue of $2 billion, reflecting shifts of +5.79% and 0%, respectively, from the last year [4]. - Recent changes to analyst estimates for Wix.com indicate a dynamic business outlook, with positive revisions suggesting optimism [4]. Valuation Metrics - Wix.com is currently trading with a Forward P/E ratio of 13.81, which is lower than the industry average of 17.04, suggesting it is trading at a discount [7]. - The company has a PEG ratio of 0.74, compared to the industry average PEG ratio of 1.35, indicating a favorable valuation relative to expected earnings growth [8]. Industry Context - The Computers - IT Services industry, which includes Wix.com, holds a Zacks Industry Rank of 88, placing it in the top 36% of over 250 industries [8]. - The Zacks Rank system, which evaluates stocks based on estimate changes, currently ranks Wix.com at 4 (Sell), indicating a less favorable outlook compared to higher-ranked stocks [6].

Group 1 - Wix.com Ltd. has announced a $2 billion share repurchase program to capitalize on its declining share price over the past year [1] - Morgan Stanley analyst Elizabeth Porter reiterated a Buy rating on Wix.com while lowering the price target from $181 to $160, which still offers an attractive upside of around 100% from current levels [1][3] - Citi also maintained a Buy rating with a price target of $150, implying an 87% upside from current levels, consistent with the median Wall Street analyst estimate of 99.6% [3] Group 2 - The Application Software-as-a-Service sector has underperformed compared to the overall technology sector and broader software sector in 2025, but there is a more constructive outlook for these stocks heading into 2026 [2] - Analysts suggest that the stock slump has made Wix.com an attractive investment opportunity on a forward P/E basis, indicating significant upside potential [3] - Wix.com offers a cloud-based web development platform with various tools and services for users and creators worldwide [4]

Core Insights - The CEO of Wix, Avishai Abrahami, expresses significant concern about the future of the workforce due to AI advancements, predicting that approximately 70% of the top 20 most popular jobs in the US will be affected within the next five to ten years [1][3] Impact of AI on Jobs - Abrahami highlights that many roles, particularly in driving for ride-share apps, taxi, and truck driving, are at high risk of being impacted by AI, with over 4 million such jobs reported by the Bureau of Labor Statistics for 2024 [4] - Customer service and call center positions are also expected to be significantly affected, as noted by other tech leaders like OpenAI's CEO [5] - A Google Cloud report indicates that AI adoption among software professionals has surged to 90%, reshaping roles such as software developers and analysts [6] Job Security and New Opportunities - Jobs requiring human performance or interaction, such as athletes and roles in the performing arts, are predicted to be safer from AI replacement [7] - High-level thinking jobs are currently performed better by humans than AI, with Abrahami stating that AI is not adept at creating new concepts or inventions [8] - The introduction of new roles, such as the xEngineer at Wix, illustrates how AI can create new job types that leverage human expertise alongside AI capabilities [3]

Core Idea - Wix.com Ltd. has launched Wix Harmony, a new flagship web creation platform, highlighted through its Super Bowl LX commercial, emphasizing a creative journey from inspiration to execution [2][3] Group 1: Wix Harmony Features - Wix Harmony offers a hybrid creation experience that integrates AI-powered creation and vibe coding with comprehensive visual editing and customization capabilities [3] - The platform is designed to support professional infrastructure necessary for business growth, promoting the idea that creation can be both natural and limitless [3] Group 2: Campaign Messaging - The Super Bowl commercial features a narrative of a business owner transitioning from an idea to a professional online presence, showcasing AI as a supportive partner while maintaining human control over creative decisions [4] - Omer Shai, CMO at Wix, stated that the campaign illustrates the potential of creation when technology and creativity work in harmony, marking a new chapter for the web [5] Group 3: Company Overview - Founded in 2006, Wix is a leading global platform that empowers millions of users, including self-creators, agencies, and enterprises, with advanced infrastructure, performance, and security [5] - The platform combines AI, flexible web design, domains, hosting, templates, and robust business solutions to help users build brands, connect with audiences, and scale businesses online [5]

Group 1 - Base44 has launched an AI-powered platform that allows users to create fully functioning apps in minutes using natural language, aiming to redefine app creation by eliminating traditional barriers [3][5] - The campaign titled "It's app to you" emphasizes the excitement of users when they realize they can create and launch their own apps, fostering a sense of community and sharing among creators [3][4] - Base44 is also hosting a nationwide contest with a total prize pool of $50,000 to encourage creativity in app building, extending the reach of their campaign beyond the Super Bowl advertisement [4] Group 2 - Founded in 2024 by Maor Shlomo, Base44's mission is to simplify the app creation process and unlock creativity at scale, catering to various needs from personal productivity to enterprise-grade applications [5] - Base44 was acquired by Wix.com Ltd in June 2025, which is a leading platform for creating and managing digital presences, indicating a strategic alignment with a major player in the digital space [5]

Company Overview - Wix.com (WIX) shares increased by 5.8% to close at $93.04, following a notable trading volume, despite a 15% loss over the past four weeks [1] - The company announced a new buyback authorization of up to $2 billion over the next two years, highlighting its strong cash flow generation and commitment to shareholder returns [2] Earnings Expectations - Wix is expected to report quarterly earnings of $1.36 per share, reflecting a year-over-year decline of 29.5%, while revenues are projected to be $528.03 million, an increase of 14.7% from the previous year [3] - The consensus EPS estimate for Wix has been revised 0.6% higher in the last 30 days, indicating a positive trend that may lead to price appreciation [4] Industry Context - Wix.com operates within the Zacks Computers - IT Services industry, where another company, Leidos (LDOS), has seen a 0.3% increase in its stock price, closing at $187.77, with a 2.1% return over the past month [4] - Leidos has a consensus EPS estimate of $2.57, which is a 2% increase from the previous month and an 8.4% increase year-over-year, also holding a Zacks Rank of 3 (Hold) [5]

Market Overview - The market is experiencing a busy day with significant earnings reports and comments from political figures impacting sentiment [2][5] - The divergence between the NASDAQ and Russell indices indicates a recent rotation of money back into technology stocks after a brief period of underperformance [3][4] Technology Sector Insights - Major technology companies are set to report earnings, with ASML's bookings nearly doubling estimates, reflecting strong demand in the semiconductor sector [4][5] - The ongoing infrastructure buildout is driving GDP growth, estimated at 4-5%, which is beneficial for the technology sector and broader economy [5][6] - There is a notable divergence within the technology sector, with some large-cap software companies hitting 52-week lows while the overall market reaches new highs [8][19] Federal Reserve and Economic Policy - The Federal Open Market Committee (FOMC) is expected to maintain current interest rates, with little market expectation for changes, although there is interest in potential dissenting votes among new members [12][13] - The selection of the next Fed chair is generating intrigue, with several candidates being discussed, and the Senate confirmation process is a critical factor [10][17] Capital Expenditure Trends - Capital expenditure (capex) among major tech firms is a focal point, with expectations that it should neither be too high nor too low to maintain investor confidence [9][20] - The impact of artificial intelligence (AI) on software companies remains uncertain, with questions about how increased competition will affect profitability and market dynamics [22][23]

Core Insights - Base44, an AI-powered app creation platform, will launch its first Super Bowl campaign during Super Bowl LX on February 8, 2026, highlighting its rapid growth and market presence [1][2]. Group 1: Company Overview - Base44 is an AI-driven platform that allows users to create fully functioning applications in minutes using natural language, catering to various needs from personal productivity to enterprise-grade products [3]. - Founded in 2024 by Maor Shlomo, Base44 aims to simplify app development and enhance creativity at scale [3]. - The company was acquired by Wix.com Ltd in June 2025, a leading platform for digital presence management [3]. Group 2: Growth and Market Impact - The company has experienced extraordinary growth over the past year, transitioning from an idea to empowering millions of users in app development globally [2]. - Shay Korin, VP of Marketing, emphasized that the pace of creation is rapidly changing as barriers to building apps are removed [2].