Wix shares drop 27% as class action targets AI product claims

Wix.com Ltd. investors who bought shares between February 2025 and May 2026 face a September 22 lead plaintiff deadline in a securities class action. The lawsuit alleges the company misled the market about the competitiveness of its AI-powered products and the true cost of developing them.

"The complaint identifies statements attributed to Wix's President while investors allegedly faced a $126.42 per-share decline," Joseph E. Levi, a partner at Levi & Korsinsky, said.

Wix shares fell 27% in mid-May 2026 after the company reported Q1 2026 financial results that missed analyst expectations. The stock dropped from $181.74 on May 20, 2025 to $55.32 on May 13, 2026 — a decline of about 70% over the class period. The complaint names co-founder and president Nir Zohar, along with CEO Avishai Abrahami and CFO Lior Shemesh, as individual defendants.

The lawsuit centers on Wix's AI strategy, including its Wix Harmony platform. Plaintiffs allege the company overstated demand for its AI tools and understated the accelerating costs tied to AI development, compute, and marketing. Later disclosures revealed that Wix Harmony had missing capabilities and that professional developers were using competing AI tools, according to the complaint. The action asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

The September 22 lead plaintiff deadline gives investors roughly seven weeks to seek appointment as the class representative. The case, filed in the Northern District of Illinois, could result in significant settlement costs for Wix if plaintiffs prevail. The company's next quarterly report will be closely watched for any further disclosures about AI product performance and cost trends.

This article is for informational purposes only and does not constitute investment advice.