MongoDB (MDB) Shares Skyrocket, What You Need To Know

Jabin Bastian /
2023/06/22 3:13 pm EDT

What Happened:

Shares of database software company MongoDB (MDB) jumped 5.35% in the afternoon session after the company announced, at its developer conference, a new partnership with Google Cloud to facilitate the use of generative AI. The collaboration aims to simplify software development by providing solutions and integrations that allow developers to leverage AI technologies more easily. MongoDB Atlas, the company's multi-cloud data platform, will be integrated with Google Cloud's Vertex AI models to enable seamless application development with AI-powered features. Since 2018, MongoDB and Google Cloud have joined forces to enable the adoption of cloud-native data solutions among thousands of their shared customers. Some of these customers include Keller Williams, a real estate company, Rent the Runway, a fashion rental service, and Ulta, a beauty retailer. Since the first quarter of 2023, the market has reacted favorably to news of innovation in artificial intelligence, and the new partnership should give investors more reasons to be positive. After the initial pop the shares cooled down to $388.33, up 4.1% from previous close.

What is the market telling us:

MongoDB's shares are very volatile and over the last year have had 56 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 21 days ago, when the stock gained 16.5% on the news that the company reported a "beat and raise" quarter. First quarter results beat analysts' expectations for revenue, gross margin, free cash flow, and earnings per share. Guidance was also strong. Revenue guidance for the next quarter exceeded expectations. The full year guidance was raised and also came in ahead of Consensus. The profitability guidance was similarly impressive as operating income guidance for the next quarter and full year came in ahead. The company touched on the current AI trend noting that "...MongoDB's developer data platform is well positioned to benefit from the next wave of AI applications in the years to come". Overall it was a strong quarter for the company, with solid results and impressive guidance.

MongoDB is up 104% since the beginning of the year, and at $388.33 per share it is trading close to its 52-week high of $388.57 from June 2023. Investors who bought $1,000 worth of MongoDB's shares five years ago would now be looking at an investment worth $6,820.

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