Today witnessed an increase in the value of MongoDB's shares.
MongoDB's shares witnessed a significant boost on Thursday, and it seems several elements are contributing to this surge. Firstly, the company's association with Microsoft might be strengthening, which could potentially enhance MongoDB's adoption. Secondly, indications suggest that software spending is gradually recovering. These factors might be responsible for the 14% rise in MongoDB's stock price by 1:50 p.m. ET.
Could MongoDB's fortunes be shifting?
Shares of MongoDB's counterpart, Snowflake, saw substantial growth today, due to an increase in its customer base and revenue under contract. On the other hand, MongoDB's management mentioned that its consumption trends in the current year have been subpar due to economic conditions. The broader economic climate has indeed been a point of concern for investors. However, with Snowflake's performance improving, it's a positive sign for MongoDB.
MongoDB is scheduled to release its financial report for the third quarter of 2025 on December 9. At that point, investors will learn whether these positive sentiments are justified.
But it's not just Snowflake's performance that's boosting investor confidence in MongoDB. On Tuesday, the company expanded its alliance with Microsoft. Now, customers of both companies have access to a wider range of MongoDB's products and features, which could boost adoption.
It appears that any doubts some investors may have had about MongoDB on Tuesday have since dwindled, in light of what's happening at Snowflake.
What to keep an eye on in the upcoming quarter with MongoDB
Although MongoDB's Q2 revenue only grew by 13% year-over-year, it predicted at least 14% growth for Q3. Given the potential improvement in outlook, it's plausible that MongoDB might surpass this growth rate.
A critical aspect to focus on when MongoDB reports Q3 earnings is the adoption of its artificial intelligence (AI) products. AI adoption hasn't met expectations thus far, so an uptick in adoption could add to investor optimism.
Given the positive momentum from Snowflake's performance and MongoDB's expanded alliance with Microsoft, investors might be eager to allocate more money in MongoDB's finance sector, potentially leading to increased investing activities. The upcoming financial report for MongoDB could provide clarity on whether these positive factors are translating into strengthened financial performance, with a particular focus on the growth rate and adoption of its AI products.
