monday.com faces challenges amid AI disruption concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 22 2024
0mins
Should l Buy MNDY?
Source: Business Insider
monday.com Ltd. has seen its stock price drop significantly, hitting a 52-week low amid broader market declines, with the Nasdaq-100 down 1.55% and the S&P 500 down 1.34%.
The software sector is experiencing heightened anxiety as artificial intelligence threatens to disrupt market share, leading to significant stock price declines across the industry. Despite this, analysts believe that monday.com is well-positioned to benefit from digital and AI collaboration trends, indicating potential for future growth despite current market pressures.
The implications of these developments suggest that while monday.com is facing immediate challenges, its strategic positioning may allow it to navigate the evolving landscape of the software industry effectively.
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Analyst Views on MNDY
Wall Street analysts forecast MNDY stock price to rise
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 77.000
Low
195.00
Averages
235.58
High
310.00
Current: 77.000
Low
195.00
Averages
235.58
High
310.00
About MNDY
Monday.Com Ltd is an Israel-based company engaged primarily in the software sector. The Company provides cloud-based platform that enables its users to create custom applications and project management software. The platform offers a Work Operating System (Work OS) that provides modular building blocks to create software applications and work management tools. This system is designed to enhance team collaboration and streamline workflows across various business functions, including project management, CRM, marketing, and more. The Company has teams in Tel Aviv, New York, San Francisco, Miami, Chicago, London, Kiev, and Sydney. The Company customize its platform to suit any business vertical and serves customers worldwide.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Withdrawal of 2027 Guidance: Management withdrew its 2027 financial guidance due to currency fluctuations and AI market uncertainties, leading to a significant drop in investor confidence and a 20.1% stock price decline on the day of the report.
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See More
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- Asset Management Proportion: This acquisition raised MercadoLibre's share to 6.16% of TenCore Partners' 13F reportable AUM, reflecting its significance in the investment portfolio and potentially influencing future investment decisions.
- Financial Performance: MercadoLibre reported a 37% year-over-year revenue growth in the first nine months of 2025, but rising costs limited net income growth to just 13%, indicating challenges in profitability that could affect stock performance.
- Market Outlook: Despite competitive pressures from Amazon and others, improving economic conditions in Argentina and Venezuela could provide opportunities for MercadoLibre's e-commerce business, suggesting that TenCore's increased investment may yield returns in the future.
See More
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- Stake Increase: TenCore Partners, LP increased its position in MercadoLibre by 2,025 shares during Q4 2025, with an estimated trade value of $4.25 million, reflecting confidence in the Latin American e-commerce giant.
- Value Growth: By year-end 2025, the value of MercadoLibre's stake rose by $2.80 million, showcasing the dual impact of market price changes and the purchase, thereby enhancing the fund's assets under management.
- Asset Allocation: TenCore Partners held 5,983 shares of MercadoLibre valued at $12.05 million, accounting for 6.16% of the fund's AUM, indicating its significance despite not being in the top five holdings.
- Market Challenges: Although MercadoLibre's revenue grew by 37% in the first nine months of 2025, profit growth was limited to 13% due to increased competition and rising non-performing loans, which may affect TenCore's investment returns.
See More
Figma Launches AI Design Conversion Feature
- AI Design Conversion Feature: Figma has partnered with Anthropic to launch the 'Code to Canvas' feature, which converts code generated by AI tools into editable designs, aiming to enhance team efficiency despite the risk of AI tools potentially replacing design roles.
- Market Reaction: Since its IPO last summer, Figma's stock has plummeted approximately 85% from its 52-week high of $142.92, reflecting the broader malaise in the SaaS sector amid what traders are calling the 'SaaSpocalypse'.
- Industry Impact: As AI tools continue to advance, the design refinement step may be skipped altogether, posing a challenge to Figma's market positioning and potentially affecting its future user retention and market share.
- Upcoming Earnings Report: Figma is set to release its earnings report after market close on Wednesday, with high investor interest in how the company plans to navigate current market pressures and competitive dynamics.
See More
Analysis of Kyndryl and Monday.com Quarterly Report Fallout
- Kyndryl Financial Crisis: Kyndryl's CFO and General Counsel were dismissed, leading to a delay in quarterly filings and an inability to verify the effectiveness of internal controls over financial reporting, resulting in a more than 50% drop in stock price, indicating severe market concerns about its financial health and potential investor confidence collapse.
- Monday.com Performance Decline: Despite reporting mid-20% revenue growth, Monday.com faced a significant market reaction with stock prices dropping over 20% due to falling operating income and margins, reflecting investor pessimism about its future growth and potential market share loss.
- Surge in Capital Expenditures: Major tech companies like Alphabet and Meta reported a total capital expenditure of $400 billion over the last four quarters, highlighting fierce competition for AI infrastructure, which may lead to future financial strain and market instability.
- CoreWeave's High Leverage Risk: CoreWeave carries $14 billion in debt with over $300 million in quarterly interest payments, and despite strong market performance, its high leverage and reliance on future revenue raise significant bankruptcy risks, necessitating cautious evaluation of its sustainability.
See More
Monday.com Shares Plunge 25% Despite Strong Earnings Report
- Earnings Beat Expectations: Monday.com reported a 25% year-over-year revenue increase to $333.9 million, with adjusted earnings falling from $1.08 to $1.04 per diluted share, still surpassing Wall Street's expectations of $0.92, demonstrating resilience in the market.
- Guidance Withdrawal: The management withdrew its 2027 guidance due to currency exchange pressures and the evolving AI landscape, which many investors interpreted as a sign that AI agents threaten its project management business, leading to a 20.1% drop in stock price on that day.
- Overreaction in Market: Despite the significant stock drop, analysts believe the reaction was excessive, as Monday.com still projects approximately 18% revenue growth and 28% higher adjusted operating profits in 2026, indicating strong long-term growth potential.
- AI Strategy Response: The company has launched its own AI agent platform, allowing clients to integrate multi-step AI tools into their Work OS applications, indicating that Monday.com is actively addressing AI challenges and may turn them into business opportunities.
See More
Monday.com Beats Earnings Expectations but Stock Plummets
- Strong Earnings Report: Monday.com reported a 25% year-over-year revenue increase, reaching $333.9 million, surpassing Wall Street's expectation of $329.5 million, indicating robust performance in the project management sector.
- Decline in Adjusted Earnings: Despite the revenue beat, adjusted earnings per share fell from $1.08 to $1.04, below the analyst consensus of $0.92, reflecting profitability pressures the company is facing.
- Withdrawal of 2027 Guidance: Management withdrew its 2027 financial guidance due to currency fluctuations and AI market uncertainties, leading to a significant drop in investor confidence and a 20.1% stock price decline on the day of the report.
- AI Challenges and Opportunities: The company has launched its own AI agent platform, allowing clients to integrate multi-step AI tools into their Work OS applications, and management projects an 18% revenue growth and a 28% increase in adjusted operating profits by 2026, suggesting potential for future growth despite current challenges.
See More
