Wix shares plunge 27% as company returns to losses despite AI push
Heavy spending on Base44 and AI expansion rattles investors.
After a period in which it appeared that Wix.com had regained momentum and returned to steady growth, the company’s opening results for 2026 point to renewed pressure, including a return to losses, sending the stock down 27% on Wall Street.
The sharp decline has dragged Wix’s market value down to around $3 billion, one of the lowest levels in its history, only about a month after the company completed an unusual $1.6 billion share repurchase program. Wix financed the buyback partly through its cash reserves and partly through a $500 million credit line. As of the end of the quarter, the company held roughly $2 billion in cash and carried another $1.1 billion in long-term debt, raised through convertible bonds last year.
Wix has been caught in the negative sentiment surrounding software stocks over the past six months, despite not operating under a traditional software-as-a-service (SaaS) model. Investors increasingly fear that the company’s core products for building websites and online stores could become less relevant in the AI era, where websites can increasingly be generated automatically through AI-powered coding tools.
In response to these concerns, Wix moved quickly last year to acquire Base44, the startup founded by Maor Shlomo that develops software-building tools based on natural-language instructions. Although the business is growing rapidly and has helped Wix strengthen its AI offering, investors remain unconvinced about the company’s long-term positioning in an increasingly competitive AI market.
The return to losses in the first quarter appears to have intensified investor concerns. Wix posted a net loss of $57.5 million, after several quarters of profitability, despite reporting a 14% increase in revenue to $541 million. Cash flow also declined 21% to $112 million.
The company attributed the loss primarily to sharply higher marketing and sales expenses, as well as additional payments tied to the acquisition agreement with Base44 founder Maor Shlomo. Wix aired two Super Bowl commercials this year, one promoting Wix products and another focused on Base44.
At the same time, strong demand for Base44’s AI-powered “vibe coding” platform, which has already surpassed an annual revenue run rate of $100 million ahead of expectations, is forcing Wix to make further milestone payments to Shlomo. During the quarter, Wix paid him an additional $38 million, and the company now estimates that additional payments will likely be required later this year.
According to Wix, Base44’s annual recurring revenue reached $150 million in May, significantly ahead of internal targets.
The rapid growth of the Base44 business presents a mixed picture for Wix. On one hand, it positions the company as an increasingly relevant player in AI-powered software development and is likely responsible for a significant share of current growth. On the other hand, the expansion comes with heavy computing costs as usage scales.
Wix is also investing aggressively in building its own proprietary AI model. In a letter to investors, founder and CEO Avishai Abrahami said the model is intended to improve the accuracy of Harmony, Wix’s AI-based website-building platform. While the initiative currently adds to expenses, the company believes it could reduce inference costs in the future.
For now, Wix is not discussing layoffs, although its workforce declined by 63 employees during the quarter, leaving the company with 5,277 employees worldwide.
The company has also refrained from providing detailed guidance for the remainder of the year, offering only a broad expectation for growth at a pace similar to that recorded in the first quarter.
