GoDaddy (GDDY) faces growing pressure from artificial intelligence-driven changes in how businesses build websites and buy domains, which could weaken pricing power, reduce product attach rates and erode domain market share, RBC Capital Markets said in a note emailed Monday.

AI agents and vibe coding platforms are making it easier for customers to compare vendors, build websites and purchase domains, potentially reducing the importance of GoDaddy's traditional domain-to-hosting-to-building-to-payments web design journey, the investment firm said.

GoDaddy's .com market share has fallen to about 31% as of June from roughly 35% in 2022, while its share of new .com registrations has declined to a 17% to 19% range from the mid-20s-percentage range four years ago, according to the note.

The firm said GoDaddy's Airo and new APIs are showing promise, but AI-related risks leave less room for valuation expansion.

RBC Capital Markets downgraded GoDaddy to sector perform from outperform, with a $95 price target.

Shares of GoDaddy were down 1.8% in Monday trading.

Price: 102.44, Change: -1.91, Percent Change: -1.84