GoDaddy's AI-Driven Transformation and Share Buybacks: A Strategic Rebalance for Long-Term Value?

In an era where artificial intelligence (AI) is reshaping industries, GoDaddy's strategic pivot toward AI-driven innovation and aggressive capital returns has sparked renewed interest in its long-term value proposition. The company's recent initiatives-centered on its Airo.ai platform and Agent Name Service (ANS)-alongside a $3.9 billion share buyback program, present a compelling case for reevaluating its growth narrative. This analysis examines whether these dual strategies can justify a 38–46% upside in valuation, balancing optimism about AI's transformative potential with caution about execution risks and market dynamics.

AI as a Catalyst for Growth: Airo.ai and ANS

GoDaddy's AI ambitions are anchored in two key innovations: Airo.ai, an agentic AI platform designed to streamline online business operations, and ANS, a decentralized identity protocol for AI agents. According to the company's third-quarter 2025 earnings report, Airo.ai has evolved from a generative AI tool to an "agentic" platform capable of autonomously handling tasks such as logo creation, website building, and customer support. This shift aligns with broader industry trends toward AI agents that act on behalf of users, potentially unlocking new revenue streams for GoDaddy by monetizing premium features like Airo Plus.

The Agent Name Service (ANS) further cements GoDaddy's role as an infrastructure provider in the AI ecosystem. By leveraging its DNS expertise to create an open standard for AI agent identity, GoDaddy aims to position itself as a critical node in the agentic AI marketplace. This move mirrors the company's historical strength in domain registration and web infrastructure, suggesting a strategic continuity. However, the success of ANS hinges on widespread adoption by developers and entrepreneurs-a challenge given the fragmented nature of AI standards today.

Financially, GoDaddy's AI initiatives appear to be gaining traction. The company raised its full-year 2025 revenue forecast to $4.93–$4.95 billion, citing AI-driven demand. Third-quarter revenue of $1.265 billion, up 10% year-over-year, exceeded guidance and reflected strong retention among high-value customers (those spending over $500 annually), who now represent 10% of the base. These metrics suggest that AI is not only enhancing customer experience but also driving monetization, particularly through higher average revenue per user (ARPU).

Share Buybacks: A Double-Edged Sword

While AI innovation fuels top-line growth, GoDaddy's $3.9 billion share repurchase program-executed alongside the Q3 2025 results-targets bottom-line metrics. Buybacks of this scale can artificially inflate earnings per share (EPS) by reducing the number of shares outstanding, potentially boosting the stock's appeal to value-conscious investors. However, the direct impact on GoDaddy's P/E ratio remains opaque. As noted in investor statements, the program's EPS and P/E implications are not quantified in public filings, leaving room for skepticism about whether the buyback is a strategic rebalancing or a short-term confidence play.

The timing of the buyback is also noteworthy. With GoDaddy's stock trading at a discount to its historical P/E multiples, the program could signal management's belief in undervaluation. Yet, aggressive buybacks may come at the expense of reinvestment in AI R&D or market expansion-a trade-off that could backfire if the AI initiatives underperform.

Validating the 38–46% Upside Thesis

To assess whether GoDaddy's strategies justify a 38–46% upside, one must weigh the interplay between AI-driven revenue growth and buyback-driven EPS tailwinds. The company's raised revenue forecast and 10% ARPU growth in Q3 indicate that AI is already contributing meaningfully to its financials. If Airo.ai and ANS achieve broader adoption-particularly in international markets or among small businesses-revenue could outpace current projections, amplifying the upside.

However, the absence of granular data on Airo.ai's revenue contribution and ANS's customer adoption rates introduces uncertainty. For instance, while GoDaddy attributes its Q3 success to AI, it does not specify how much of the $1.265 billion revenue directly stems from Airo.ai or ANS. Similarly, the buyback's EPS impact remains speculative without concrete figures. These gaps highlight the need for caution: even if AI delivers, execution risks-such as competition from larger tech firms or regulatory hurdles for ANS-could temper growth.

Strategic Synergies and Risks

The true strength of GoDaddy's strategy lies in its dual focus on innovation and capital efficiency. By pairing AI-driven customer retention with buybacks, the company is addressing both growth and value creation. This duality is rare in today's market, where many firms prioritize one over the other. Yet, the risks are equally pronounced. If AI adoption stalls or the buyback proves insufficient to offset macroeconomic headwinds (e.g., rising interest rates), the upside narrative could unravel.

Moreover, the AI landscape is highly competitive. While GoDaddy's domain-centric expertise gives it an edge in web infrastructure, rivals like Shopify or Squarespace may offer more integrated AI tools for e-commerce. GoDaddy's ability to differentiate Airo.ai and ANS will be critical to sustaining its premium valuation.

Conclusion: A Calculated Bet on the Future

GoDaddy's AI-driven transformation and share buybacks represent a calculated rebalancing of its strategic priorities. The company's progress in agentic AI and open standards, coupled with a disciplined approach to capital returns, creates a compelling case for long-term value. However, the 38–46% upside hinges on two key factors: the scalability of Airo.ai and ANS, and the buyback's ability to enhance EPS without diverting resources from innovation.

For investors, the path forward is neither risk-free nor guaranteed. But in a market where AI is redefining value, GoDaddy's dual strategy offers a unique blend of growth and efficiency-one that, if executed well, could indeed justify a significant re-rating.