MongoDB stock soars 23% on AI gains

The tech firm’s stock price has climbed about 72% YTD.

Earnings season has slowed to a trickle at this point in the cycle, which brings a lot of investor attention to the few companies that are still reporting earnings.

On Monday after the market closed, MongoDB (NASDAQ: MDB) released its third quarter earnings and its blowout results certainly garnered a lot of attention.

The stock was flying on Tuesday, rising some 23% to about $402 per share. The stock price has now spiked about 72% year-to-date (YTD).

The company, which provides database storage through its document database management system (DBMS), topped earnings estimates and raised its guidance.

• Revenue: $628M, up 19% year-over-year. That easily bested estimates of $594M.
• Net Loss: $2.0M, or $0.02 per share. This is down from a $9.8M, or $0.13 per share, net loss a year ago.
• Adjusted net income: $114M, or $1.32 per share. This is up from $98M, or $1.16 per share in the same quarter a year ago. It beat estimates of 79 cents per share.

The major driver of revenue was its fully managed Atlas cloud storage platform. The Atlas platform saw a 30% increase in revenue year-over-year. Overall, it accounts for 30% of the firm’s total revenue. The number of Atlas customers grew by about 19% to 60,800, driven by AI.

“Once in a lifetime” opportunity

The surge in AI applications has fueled the need for more document storage capacity as well as different types of storage, which MongoDB provides.

“MongoDB already powers core, mission-critical workloads for enterprises that are modernizing their technology stack. At the same time, MongoDB is uniquely positioned at the center of the AI platform shift,” President and CEO CJ Desai said on the earnings call. “Few technology companies have that combination of durable core strength and emerging platform relevance … We have everything required to become the generational data platform of choice in the AI era.”

Desai, who took over as CEO in November, said that major shifts in cloud, data, and AI have placed the company at an inflection point.

“MongoDB has the potential to become the generational modern data platform of this evolving era, an opportunity that comes once in a lifetime,” he said.

The revenue surge in Q3 allowed the company to raise its guidance for the full fiscal year. It is now calling for revenue of $2.434 billion to $2.439 billion, up from $2.34 billion to $2.36 billion last quarter.

Adjusted net income guidance was lifted to a range of $4.76 to $4.80 per share, up from the previous $3.64 to $3.73 per share.

This led to some massive price target increases from analysts, which surely contributed to the stock price surging Tuesday. Baird raised its target from $335 to $500 per share while DA Davidson boosted it to $465 per share and Oppenheimer raised it to $450. That suggests upside of 12% to 24% 12 months out.