Over the last 12 months, the gains of all the Magnificent Seven stocks — except Nvidia (NVDA) — have paled in comparison to GoDaddy (GDDY). And now GoDaddy stands ready to register a fresh breakout to yet another all-time high, fueled in part by a dose of artificial intelligence.
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How GoDaddy Is Going
In August, GoDaddy topped the list of new buys by the best mutual funds as Nvidia, Microsoft (MSFT), Meta Platforms (META) and all the Magnificent Seven stocks remained AWOL. These savvy investors scooped up slightly more than $2 billion worth of GoDaddy stock.
Currently, an impressive 120 funds with an A+ rating from IBD own shares of GDDY. According to IBD Stock Checkup, the stock has seen four straight quarters of rising fund ownership.
Riding such demand, shares of GoDaddy have soared since the provider of website hosting and related services reported third-quarter earnings on Nov. 2 of last year. From that report until hitting a record high on Aug. 30, GoDaddy ran up 123%.
Boosted by that run, GoDaddy has outperformed all of the Magnificent Seven stocks except Nvidia over the last 12 months. In fact, only Nvidia stock joins GoDaddy in delivering a triple-digit gain during that period. Shares of GoDaddy have climbed 115%, while Nvidia rose 212%. The next closest Mag 7 is Meta stock, which has gained 78%.
GoDaddy tops all of these tech titans in terms of its up/down volume ratio. That metric tracks institutional buying and selling over the last 13 weeks. with anything above 1.0 pointing to demand. GoDaddy sports a very strong 2.0 up/down volume ratio. By comparison, Meta (1.5), Nvidia (1.5) and Amazon.com (AMZN) (1.4) show demand, but not as strongly as GoDaddy.
| Company | Symbol | % Gain Last 12 Months* | Comp Rating | EPS Rating | RS Rating |
|---|---|---|---|---|---|
| Nvidia | NVDA | 212% | 99 | 99 | 97 |
| GoDaddy | GDDY | 115 | 87 | 99 | 93 |
| Meta Platforms | META | 78 | 96 | 97 | 91 |
| Amazon.com | AMZN | 43 | 92 | 81 | 69 |
| Apple | AAPL | 31 | 93 | 86 | 79 |
| Microsoft | MSFT | 26 | 67 | 93 | 44 |
| Alphabet | GOOGL | 17 | 78 | 98 | 41 |
| Tesla | TSLA | -13 | 49 | 57 | 46 |
*As of Oct. 17
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GoDaddy Targets New Breakout
After hitting an all-time high at the end of August, GoDaddy took a breather to begin forming a flat base. The new buy point is 167.65. The stock showed resilience Thursday, coming off its lows to eke out a small gain. Looking to notch another record high, the stock has now closed higher in five of the last six weeks. GoDaddy stands just 2% shy of a breakout.
Despite the huge run GoDaddy has already made, it still is considered a first-stage base in MarketSurge. While that’s a positive since early-stage patterns have a higher likelihood of success, investors looking to start a new position should keep GoDaddy’s prior run-up in mind. Plus, the company has earnings due on Oct. 30 and it’s always risky to buy any stock just before the company releases quarterly numbers.
Meanwhile, Nvidia is showing resilience after taking a hit with Tuesday’s sell-0ff in semiconductor stocks, led by ASML (ASML). Nvidia teased a 140.76 buy point and all-time high Thursday before giving back some gains. Shares of NVDA rose Friday, lifting the AI giant to within 2% of the new entry.
Fellow Mag 7 peer Meta stock is slightly extended as it tests support at its 21-day exponential moving average. Microsoft continues to cling to its 50-day line.
Sales Steady, Earnings Slowing
In the second quarter, GoDaddy generated slightly more than $1.12 billion in revenue. That marked a 7% year-over-year rise, matching the gain in its first quarter. Analysts expect another 7% gain for the third quarter.
Earnings growth has slowed in recent quarters. In the second quarter, GoDaddy posted an 87% rise to $1.01 per share. For the third quarter, Wall Street forecasts a 38% gain to $1.23 a share. For the full year, analysts estimate a 30% slowdown in earnings to $6.45 per share.
GoDaddy And AI
For Nvidia, Microsoft, Meta and the other Mag 7 members, artificial intelligence has been a primary focus of Wall Street for some time. GoDaddy has also gotten into that game with GoDaddy Airo, an AI-fueled customizable experience that the company includes with any new domain purchase.
GoDaddy says GoDaddy Airo enables users to create logos in minutes, as well as tap AI to get websites ready in seconds. Plus, GoDaddy boasts that the service allows clients to create and optimize email campaigns and social posts.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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