Why GoDaddy Stock Withered on Wednesday
Many investors chose not to go with GoDaddy (NYSE: GDDY) stock on Wednesday. One major factor in this was a recommendation downgrade from an analyst at a prominent American bank. On a day when the S&P 500 index essentially flat-lined, GoDaddy's stock sank by more than 4%.
The person pulling the lever on the GoDaddy downgrade was Wells Fargo 's Alec Brondolo. Well before market open that morning, he changed his rating to underweight (sell, in other words) from his preceding equal weight (hold). He also knocked a few dollars off his price target; this is now $76 per share, from $80.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
In his updated take on GoDaddy, according to reports, Brondolo zeroed in on a general concern many investors have about veteran tech companies these days -- the potential for disruption by artificial intelligence (AI) .
In his opinion, GoDaddy, the world's No. 1 domain registrar, has not properly adjusted its pricing in this era of AI-enhanced search. He pointed out that since AI overviews currently comprise 48% of all internet searches -- and often recommend cheaper registration services than GoDaddy's -- the company is likely to lose market share if it doesn't reduce its fees.
If any company is identifiable as a domain registrar in the public's collective mind, it's GoDaddy. This might not be the most compelling niche in the tech industry, even with the company's success in upselling related services, but it has done fairly well in establishing and maintaining a lead in it.
I don't think its modest valuations reflect this, so if it does indeed react to the threat of AI disruption, I'd consider its stock a buy.
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GoDaddy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $443,461 !* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,307,633 !*
Now, it's worth noting Stock Advisor's total average return is 973%, a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors.
