What Happened:
Shares of website design and e-commerce platform provider Wix.com (NASDAQ:WIX) jumped 5.09% in the afternoon session after it announced its plans to launch the AI Site Generator, a feature that uses AI technology to automate the entire website-building, design and management process. The AI Site Generator is part of a suite of AI-powered capabilities that Wix offers to its users, many of which are already available. According to the company's press statement, these capabilities enable Wix users to easily create, customize and optimize their websites, as well as grow their businesses with advanced tools and insights. Since the first quarter of 2023, the market has reacted favourably to news of innovation in artificial intelligence, and Wix's new AI-powered web solutions should raise investors' optimism. After the initial pop the shares cooled down to $83.18, up 4.79% from previous close.
What is the market telling us:
Wix's shares are a little volatile and over the last year have had 32 moves greater than 5%. The previous big move was two months ago, when the company gained 9.2% on the news that the company reported a "beat and raise" quarter. First quarter results surpassed analysts' expectations for revenue, operating income, free cash flow, and earnings per share. Revenue guidance for the next quarter and full year were also above Consensus. An additional positive aspect was the company's upward revision of the full-year free cash flow guidance, excluding HQ costs, now projected at $172 - $180 million. This reflects a significant improvement compared to the previous outlook of $152 - $162 million. Furthermore, the non-GAAP gross margin for the full year was raised to approximately 67%, surpassing the previous expectation of around 66%. These results and revisions highlight the company's strong performance and upbeat outlook going forward.
Wix is up 10.1% since the beginning of the year, but at $83.18 per share it is still trading 16.7% below its 52-week high of $99.81 from April 2023. Investors who bought $1,000 worth of Wix's shares 5 years ago would now be looking at an investment worth $763.03.
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