GoDaddy Is Flooring It to the Top of the S&P

Website-builder and domain host GoDaddy used to be known mostly for its risqué Super Bowl ads, but now it’s got a new identity: stock market rockstar. 

First added to the S&P 500 in June, GoDaddy now sits just outside the top 10 performing companies in terms of year-to-date returns, outpacing every business in the Magnificent Seven except for Nvidia. So far this year, GoDaddy’s stock has increased more than 55%, and currently trades at around $160 per share. So how did it get there?

Vroom, Vroom

GoDaddy has consistently grown its revenue since going public in 2015, but much of its current success can be attributed to — what else? — artificial intelligence: 

• In February, the business launched GoDaddy Airo, a set of AI-powered tools to help small businesses automate the process of finding domains, building websites, and creating social media posts. And it’s paying off quite well.
• In the second quarter, GoDaddy reported a profit of $146.3 million, a whopping 76.1% increase from the same period last year. Plus, it raised its 2024 revenue guidance 7% to between $4.525 billion and $4.565 billion, which caused its stock to surge at the start of the month.

Meanwhile, the S&P’s biggest players are beginning to slow, with the profits among the Mag-7 set to rise 35% in the second quarter year-over-year, a sharp downturn from 2023, according to a Bloomberg analysis. Nvidia will report its Q2 earnings later this month. Also, Tesla hasn’t had the most enjoyable 2024; its stock has fallen roughly 20% YTD.

Always Keep ‘Em Wanting More: Despite GoDaddy’s momentum, it has faced some activist pressure this year from hedge fund Starboard Value — which held a 4.5% stake in the company as of March — to grow faster, increasing its free cash flow and improving its profit margins. GoDaddy should aim for at least 40% growth and profitability for fiscal 2025, Starboard wrote in a letter in January. It’s like when you get an A on a test, but your mother says it could’ve been an A+.