What Happened?
Shares of work management platform monday.com (NASDAQ: MNDY) fell 2.2% in the morning session after investor sentiment for the software-as-a-service (SaaS) sector soured following weak revenue guidance from industry giant Salesforce.
The negative mood appears to be a spillover effect, as Salesforce's disappointing forecast has raised concerns about the growth prospects for the entire software industry. According to reports, investors are becoming wary of companies perceived to be lagging in the immediate implementation and monetization of artificial intelligence (AI). This broader market concern is weighing on related software stocks, as investors seem to be favoring companies that are already delivering tangible AI-driven results rather than promising them for the future.
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What Is The Market Telling Us
monday.com’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 3.3% on the news that MongoDB reported impressive earnings report. The data analytics company saw its shares jump nearly 40% after announcing much stronger-than-expected results, including a revenue beat and an optimistic outlook for the upcoming quarter. This performance suggested robust demand for its cloud-based database services, leading investors to believe the broader data storage and SaaS sectors are experiencing similar health. The positive sentiment created a ripple effect, with peers like DigitalOcean and Snowflake also seeing significant gains and outperforming the general market.
monday.com is down 21.4% since the beginning of the year, and at $181.71 per share, it is trading 44.6% below its 52-week high of $327.92 from February 2025. Investors who bought $1,000 worth of monday.com’s shares at the IPO in June 2021 would now be looking at an investment worth $1,016.
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