GoDaddy's (GDDY) is reworking its core web-builder offering around AI-driven "vibe coding," where large-language models assemble site layouts and content based on a user's described aesthetic or intent, Wedbush Securities said Friday in a report.

The move away from human-driven site creation is meaningful and may be material as LLM-driven traffic reshapes GoDaddy's bookings mix and affects margins, with management expecting the transition to trim near-term total bookings by 100 basis points, Wedbush said.

GoDaddy is folding stand-alone commerce tools into Airo, its agentic operating system for small businesses, the report said. Airo's annualized bookings run rate reached $50 million in Q2, up from $10 million in Q1, while traditional applications and commerce bookings moderate during the AI shift, Wedbush said.

The company said it has taken steps to offset rising AI compute costs, giving it room to support higher AI usage and increased marketing for Airo, the report said.

Wedbush maintained its outperform rating on GoDaddy stock with a $109 price target. At least four analysts cut their price targets after Q2 results and guidance on Thursday, and William Blair downgraded GoDaddy to market perform from outperform.

GoDaddy shares fell 20% in Friday trading.

Price: 79.07, Change: -20.27, Percent Change: -20.40