The lawsuit, filed by Hagens Berman on behalf of investors who purchased securities between February 19, 2025, and May 12, 2026, claims Wix overstated the performance of its AI tools while understating the associated development and promotional expenses. These AI products were positioned as the company’s primary defense against the rise of "vibe coding," an emerging trend where users build software through plain-language prompts rather than manual programming.

Evidence of the financial strain surfaced gradually. By November 2025, rising AI compute and marketing costs began impacting the firm's bottom line. However, the situation reached a breaking point on May 13, 2026, when Wix revealed that its non-GAAP operating expenses had surged 46% year-over-year. The aggressive push into AI drove non-GAAP sales and marketing costs to $190.7 million, an 88% increase that slashed the company's operating margin from 21% to just 5%.

During the subsequent earnings call, management conceded that the Harmony platform lacked critical capabilities, leading professional developers to defect to competing tools. The disclosure wiped $1.1 billion from the company's market capitalization. Reed Kathrein, the partner leading the Hagens Berman investigation, stated the firm is now examining whether Wix intentionally obscured the negative impact of these initiatives on its operating results. Investors have until September 22, 2026, to file for lead plaintiff status.