BofA resets MongoDB stock price target after earnings

BofA pointed to stronger-than-expected Atlas growth, a raised FY2027 outlook, and aboriginal traction with frontier AI labs arsenic grounds that concern momentum is building.

Atlas maturation pushed backmost against the slowdown communicative

In the company's first-quarter results reported connected May 28, Atlas reported 29.4% year-over-year gross growth, a flimsy acceleration from the 29.2% maturation successful the anterior quarter. That effect exceeded Bank of America's expectations and challenged the presumption that MongoDB's unreality concern was headed toward a sharper slowdown.

BofA was peculiarly encouraged by MongoDB's guidance. Management raised FY2027 gross guidance to $2.92 cardinal to $2.96 billion, and Bank of America noted that the summation exceeded the size of the quarterly beat. Analysts viewed that arsenic grounds of stronger underlying depletion trends and healthier lawsuit demand.

Atlas remains MongoDB's superior maturation motor and the instauration for its premium valuation. Stronger depletion reduces the hazard of estimation cuts and supports assurance that lawsuit workloads volition proceed to grow connected the platform.

Management besides guided to astir 26% Atlas maturation successful fiscal 2Q27, good supra Wall Street expectations. The situation is that management's full-year guidance inactive implies that Atlas's maturation volition dilatory to the 20-21% scope during the 2nd fractional of FY2027.

However, Bank of America noted that if MongoDB delivers a akin bushed to the 1 it posted successful the archetypal quarter, Atlas maturation could stay adjacent the 29% scope contempt tougher comparisons.

AI adoption is moving into accumulation

The astir absorbing improvement from the 4th whitethorn person been MongoDB's advancement successful AI.

Bank of America highlighted management's disclosure that MongoDB landed deals with "several frontier AI labs," a motion that immoderate of the astir precocious AI developers are utilizing the level for accumulation workloads. The steadfast said these wins show that MongoDB's architecture, scalability, and multi-cloud capabilities are resonating with customers gathering next-generation AI applications.

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