Why Wix Stock Collapsed 56% In The First Half of 2026

Shares of Wix.com (NASDAQ: WIX) have fallen 56% in the first half of 2026, according to data from S&P Global Market Intelligence. The website builder is at a turning point due to advances in artificial intelligence (AI) that could disrupt its existing business. Revenue keeps growing, but so far, Wix has not been able to tamp down the narrative that new coding tools will disrupt its drag-and-drop platform.

The stock is now down 85% from its highs, but it continues to post solid growth. Does that make the stock a buy-the-dip candidate right now?

Large expenses and an AI narrative

As a website-building platform for small businesses, there is a strong Wall Street theme that new software tools like Claude Code will replace specific software like Wix. Wix has responded to the AI revolution with tools of its own, such as the homegrown acquisition of Base44, an AI application builder, and the internally developed Wix Harmony chatbot website creator.

Revenue has grown over the last few quarters, especially because of Base44's monstrous growth. Revenue was up 14% year-over-year to $541 million in Q1. However, it recently reduced its full-year revenue guidance by $25 million due to a slowdown in its partners' business, which involves third-party designers using Wix's tools to build websites/software for clients. The fear is that Wix is being replaced by AI tools.

Adding to the business's fears is the fact that Wix's expenses grew massively last quarter due to acquisition bonuses for Base44 and two Super Bowl commercial slots. While one could argue that buying Super Bowl commercials is a waste of time, these are one-time expenses that will not be repeated this year and have nothing to do with AI disruption. In fact, due to cost-saving measures, Wix is now expecting full-year adjusted free cash flow of $420 million, $20 million above its previous estimate.

Image source: Getty Images.

Should you buy the dip?

For anyone looking at Wix stock, management has already been doing its own form of "buying the dip" by repurchasing 30% of its outstanding shares in an April tender offer. This will significantly reduce shares outstanding and increase long-term earnings per share and free cash flow per share.

Wix currently has a market cap of just $2.2 billion and is guiding for $420 million in free cash flow in 2026. Unless you think AI software will kill this business next year, the stock looks mighty cheap after this collapse, and could be worth buying the dip on at current prices.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Wix.com. The Motley Fool has a disclosure policy.