Wix.com Ltd. (WIX) stock got a boost after Wedbush raised its price target on the shares to $80 from $55, following the company's latest earnings results, which showed improving gross margins and continued growth in its Partner Program.

At a Glance

• Wedbush raised its price target on WIX to $80 from $55 while keeping a Neutral rating.
• Wix's internally trained LLM, Base1, launched in June 2026, with Base44 non-GAAP gross margins expected at about 60% in the second half of 2026.
• Partner Program revenue grew 17% year over year in the second quarter.
• Management plans to reinvest AI cost savings into sales and marketing.
• Wedbush nudged its Q3 revenue estimate down slightly to $567 million but raised its GAAP gross profit estimate to $380 million.

Base44 Margins Expected Near 60%

Wedbush analyst Ygal Arounian noted that Wix's Base44 platform is expected to reach a non-GAAP gross margin of approximately 60% in the second half of 2026, up from near-zero at the start of the year. The improvement is expected to add around 2 percentage points to consolidated non-GAAP gross margins in the second half versus the first half.

Base44 is an AI app-building platform that Wix acquired in mid-2025, which lets users generate working apps and tools from plain-language prompts. Gross margin has become a closely watched metric for software companies rolling out generative AI, because the cost of serving AI-driven traffic can weigh on profitability, which is why the move from near-zero margins to roughly 60% sits at the center of the analyst commentary.

Wix launched Base1, its internally trained large language model, in June 2026. Management said a large volume of traffic is already running on non-frontier models, which is helping to bring costs down. Shifting AI workloads away from frontier models has become a common lever for AI-heavy software companies seeking to contain inference costs.

Despite the margin gains, Wedbush held its Neutral rating on the stock. The firm raised its Q3 GAAP gross profit estimate to $380 million from $370 million but trimmed its Q3 revenue estimate slightly to $567 million from $569 million.

Partner Program Grows 17% Year Over Year

Wix's Partner Program posted 17% revenue growth year over year in the second quarter. The program serves agencies and freelancers, with benefits including priority support, revenue-share opportunities, and client leads through the Wix Marketplace. Agencies and freelancers are a significant channel for website platforms because each partner can bring in and manage many client accounts.

Some partners did pull back their activity on Wix during the quarter, likely moving toward other vibe-coding tools. Many others, however, increased their activity on Base44, partially offsetting that shift. The movement mirrors the broader competitive landscape in website building, where AI tools that create sites and apps from text prompts have spread quickly and are drawing attention from both do-it-yourself users and professional builders.

Management said it plans to take the savings generated by running on non-frontier AI models and reinvest them into sales and marketing, with the goal of capturing more demand for Base44. How that reinvestment translates into Base44 adoption, and whether Partner Program growth holds up, will be visible in Wix's coming quarterly reports.

AI Upgrade Drives Investor Optimism

Investor confidence picked up after management raised its full-year outlook for revenue and free cash flow, pointing to demand for the company's AI tools and the Wix Studio platform, which is built for agencies and freelance web professionals. The updated guidance sparked heavy trading activity in the stock.

Wix's subscription-based revenue model provides a more predictable cash flow stream, which has helped support ongoing investment in AI features and business services.

That said, the company carries rising debt levels and a negative equity position. If customer renewal trends weaken or AI spending increases, that leverage could put pressure on earnings.

WIX stock is down 29% year to date, with a current market capitalization of $3.1 billion and an average daily trading volume of around 1.68 million shares.

Wedbush's revised price target of $80 represents the firm's updated view following the Q2 results and the improved margin outlook.

This article first appeared on CoinCentral.