GoDaddy's 11% Plunge: Earnings Beat or Market Mistrust?

Summary
• GoDaddy (GDDY) plunges 11% intraday to $133.72, breaching its 52-week low of $133.04
• Q2 earnings beat estimates with $1.41 EPS and $1.22B revenue, yet shares drop 3.55% post-earnings
• Technical indicators signal bearish momentum: RSI at 15.27, MACD histogram -1.22, and price trading below all major moving averages

GoDaddy’s Q2 earnings report delivered a mixed bag for investors. While the company exceeded revenue and EPS estimates, the stock’s sharp intraday decline—despite a strong earnings beat—reflects deepening skepticism about its long-term growth trajectory. With the stock trading near its 52-week low and technical indicators flashing red, the market is demanding clarity on whether GoDaddy’s recent strategic moves, including a $3B share buyback and AI-driven commerce initiatives, can reverse its underperformance.

Earnings Beat vs. Weak Guidance: A Disconnect in Market Sentiment
GoDaddy’s Q2 results showcased resilience in EBITDA and revenue growth, but the market fixated on weaker-than-expected customer retention and muted guidance. The company reported 20.41 million customers, a 0.3% sequential decline, and raised 2025 revenue guidance to $4.92B—still below the 7.2% sell-side consensus. Investors interpreted this as a signal that GoDaddy’s core domain business is losing momentum, while its newer AI-powered commerce tools (Airo) have yet to translate into meaningful revenue acceleration. The post-earnings sell-off suggests traders are pricing in execution risks around the .CO TLD registry exit and slowing SMB digital adoption.

Internet Services Sector Weakness: Shopify’s -1.17% Drag
The Internet Services and Infrastructure sector, where GoDaddy operates, has underperformed broader tech indices year-to-date. Sector leader Shopify (SHOP) fell 1.17% intraday, reflecting broader concerns about e-commerce deceleration. While GoDaddy’s AI-driven commerce initiatives aim to differentiate it from Shopify and Wix, the market is treating the entire sector with caution amid macroeconomic headwinds. The 23.8% YTD drop in GDDY shares versus the sector’s 12.2% gain underscores a lack of conviction in GoDaddy’s ability to outperform peers.

Bearish Momentum Play: Options and ETFs for a Volatile Rebound
• MACD: -5.54 (bearish divergence), RSI: 15.27 (oversold), Bollinger Bands: 133.04 (lower band)
• 200D MA: 183.60 (well below), 30D MA: 168.26 (resistance ahead)

GoDaddy’s technical profile screams oversold conditions, but the bearish trend remains intact. Key levels to watch: 133.04 (52W low), 145.17 (intraday high), and 163.89 (20D MA). The SPDR S&P 500 ETF (SPY) and XLK (Communication Services) could offer directional exposure if the broader market stabilizes.

Top Options Picks:
• GDDY20250815C133 (Call, $133 strike, 8/15 expiry):
- IV: 28.34% (moderate), Leverage: 50.44%, Delta: 0.56, Theta: -0.52, Gamma: 0.07
- Payoff at 5% downside (126.53): $0 (strike above current price)
- Why: High gamma and moderate IV make this call sensitive to a rebound above 133.
• GDDY20250815C135 (Call, $135 strike, 8/15 expiry):
- IV: 31.61% (moderate), Leverage: 68.55%, Delta: 0.43, Theta: -0.45, Gamma: 0.06
- Payoff at 5% downside (126.53): $0
- Why: Strong leverage ratio and high gamma position it to benefit from a sharp reversal.

Aggressive bulls may consider GDDY20250815C133 into a bounce above 133.04, while GDDY20250815C135 offers a higher-risk, higher-reward play if the stock breaks above 145.17.

Backtest Godaddy Stock Performance
The backtest of GDDY's performance after an intraday plunge of -11% shows favorable short-to-medium-term gains. The 3-Day win rate is 54.09%, the 10-Day win rate is 59.11%, and the 30-Day win rate is 64.50%. This indicates that following such a significant dip, the stock tends to exhibit positive returns over various time frames, with the maximum return of 5.29% observed within 59 days.

Rebound or Reckoning? Key Levels to Watch
GoDaddy’s 11% intraday plunge reflects a market grappling with its strategic execution risks and sector-wide headwinds. While the stock’s oversold RSI and proximity to the 52-week low suggest a potential rebound, the bearish technical setup—including a 200D MA gap of $50—demands caution. Investors should monitor the 133.04 support level and the 145.17 intraday high as critical inflection points. The sector leader Shopify’s -1.17% decline also signals broader e-commerce fragility. Act now: Consider GDDY20250815C133 for a short-term bounce or GDDY20250815C135 for a high-leverage reversal trade if the stock breaks above 145.17.