GoDaddy (GDDY) recently launched Airo for WordPress, an AI driven website experience for small businesses and web professionals, while also supporting open AI agent standards with Infoblox through the Agent Name Service initiative.

Despite the AI product launches and open standards work, GoDaddy’s share price return has been mixed. The stock is at US$87.18, with a 1-month share price return of 5.89%, but a year-to-date share price return down 26.44%. The 3-year total shareholder return of 21.86% points to stronger longer term delivery than the 1-year total shareholder return, which is down 54.16%.

If you are looking beyond GoDaddy to see where AI is reshaping opportunities, now is a good time to scan 29 AI small caps

So with GoDaddy trading at US$87.18, a 3 year total return in positive territory but the 1 year performance sharply lower, and a sizeable gap to the average analyst price target, is there hidden value here or is the market already pricing in future growth?

Most Popular Narrative: 27% Undervalued

GoDaddy’s most followed narrative puts fair value at about $119.43 per share, compared with the current $87.18 price. This naturally raises questions about what is driving that gap.

The increasing need for online presence among small and medium businesses, coupled with greater global internet adoption, is driving expansion in GoDaddy's addressable market, reflected in double-digit growth for high-margin Applications & Commerce (A&C) revenue and bookings. This is likely to support sustained top-line growth.

Want to understand why this narrative still supports a higher fair value even after lower growth and multiple assumptions, and how earnings, margins and the discount rate fit together?

Result: Fair Value of $119.43 (UNDERVALUED)

However, if AI agents fail to gain traction or rivals like Shopify and Wix draw more small businesses away, the margin and growth narrative could quickly lose support.

Next Steps

With mixed signals on value, risk and AI potential, now is a good moment to check the numbers yourself, weigh both sides, and review the 4 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.