AI disruption questions hang over GoDaddy’s future

Shares are off over 60% in the past 12 months as investors worry about AI’s impact.

It’s been a rough day for GoDaddy (NYSE: GDDY). It’s also been a rough 12 months.

The stock is down about 12% today as I write this. Shares are down by more than 60% since peaking in February 2025.

Some people enjoy watching incumbents struggle. But GoDaddy is a bellwether for the industry, and everyone should be concerned when its shares slide.

A couple of things are impacting GoDaddy right now. One is long-term, and one is short-term.

In the long term, it’s artificial intelligence.

GoDaddy has been quick to embrace the technology. AI is now generating the majority of code for the company’s engineers. It’s also starting to handle some sales and support duties. And the company has embraced it for its products, too, offering agents and AI-powered site development.

While this helps the company cut costs and offer new products, there’s a lot of FUD right now for technology companies and AI.

A viral blog post published this week summarized the fears many have about technology incumbents, such as whether they will be disintermediated.

Some of the companies mentioned in the post are facing significant pressure. Shares in Asana (NYSE: ASAN) are down 37% over the past month, and shares in ServiceNow (NYSE: NOW) are down 24%. GoDaddy wasn’t mentioned in the post, but it has lost a quarter of its value in the past month.

There’s been a lot of selling on Wall Street as people try to piece together the impact AI will have on various businesses, especially those that are entrenched in their industries.

Whenever I speak to someone in the domain business these days, I ask how they think AI will impact our industry. I get a wide range of answers. There’s certainly no certainty, and investors like to have some certainty.

GoDaddy knows these questions are top of mind with its investors. It dedicated its prepared remarks on yesterday’s investor call to discussing how the company is well positioned for AI. The question is whether investors agree.

In the shorter term, GoDaddy did not impress investors with its results and guidance yesterday. Bookings fell below revenue. Since bookings typically precede revenue, this is problematic.

The company said this was due to a marketing campaign that was too successful. It offered a one-year .com promo, leading many customers who would have bought longer-term products to buy a one-year term instead.

Take a step back, though, and the decision to run this campaign likely had at least something to do with the impact of AI.

On the investor call, an analyst with Oppenheimer & Co. Inc asked:

One question that we’ve been getting in our inbox on this new go-to-market change, was it necessitated by any changes you saw in your pre-existing pipeline, whether it was just pipeline build, conversion? Or is this just really you guys kind of trying to open the funnel a little bit and pursuing a different customer type.

GoDaddy CEO Aman Bhutani responded:

I think, Ken, both things are true. The world is changing very, very quickly, and I don’t think anyone is insulated from it. The idea was to improve our go-to-market approach to expand that approach, but we’re sort of conscious of what’s changing in the world. When I think about the key metrics that we look at, we’re looking at traffic, we’re looking at conversion, we’re looking at attach, we’re looking at product activation, and we’re looking at renewals. And we’re very, very strong across those metrics, right? We have strong experimentation muscle in the company that if I go backwards, puts a lot of attention on renewals and activation on attach and conversion. But expanding the top of the funnel in a fast-changing world, gives us more levers as things evolve.

As an example, a lot of companies are facing challenges of traffic from search. When you look at GoDaddy, we continue to have a healthy traffic funnel because, one, we’re able to go into other channels to drive traffic, and two, we’re constantly able to improve conversion as we do that. So we’re constantly looking at those five things in the context of what’s happening in the world.

There’s no doubt that AI is impacting the domain industry and its companies. There’s a healthy debate about whether the risk factors are overblown, and only time will tell.