Wix.com (WIX) Stock Drops Despite Q3 Beat as High AI Costs and Base44 Investments Hit Operating Margins

Core Insights - Wix.com Ltd. is considered one of the best upside stocks to buy currently, despite a recent price target reduction from $220 to $160 by Oppenheimer analyst Ken Wong, who maintains an Outperform rating on the shares [1][2] - The company's Q3 2025 performance showed a 14% year-over-year increase in total bookings to $515 million and total revenue also increased by 14% to $505 million, driven by the strong performance of its Base44 product [3] Financial Performance - Total bookings for Q3 2025 reached $515 million, marking a 14% increase year-over-year [3] - Total revenue for the same period was $505 million, also reflecting a 14% year-over-year growth [3] - Base44, a recent acquisition, attracted over $2 million in users and is projected to achieve at least $50 million in annual recurring revenue (ARR) by year-end [3] Investment Considerations - The market reacted negatively to Wix's performance due to higher-than-expected costs related to AI development and increased sales and marketing investments for Base44, which were anticipated to remain flat [2][3] - Despite short-term spending concerns, there is optimism regarding Wix's core business and its potential for AI monetization leading into 2026 [2]