The Stock of the Day for Friday is MongoDB (MDB), as the company is exhibiting a consolidation pattern and is poised for potential growth. Analysts anticipate a surge in artificial intelligence development, leading to a higher demand for extensive data, which could benefit this database software provider.
Today, MDB stock is showing a slight increase of nearly 1% at 392.28 on the stock market.
MongoDB’s stocks surged by 98% at the beginning of the year’s trading session. The company is also featured on the IBD Tech Leaders and 50 lists.
Assessing the Artificial Intelligence Potential of MDB Stock
The core offering of MongoDB, headquartered in New York, is its NoSQL-based Atlas system. This document-oriented data platform empowers developers with flexibility and the ability to manage vast amounts of data while supporting various cloud programs.
Wall Street views MongoDB as a promising player in the realm of artificial intelligence, poised to capture a larger market share in the expanding database sector.
In a recent report, BofA Securities analyst Brad Sills described MongoDB as “a top-tier next-generation database provider well-positioned in the rapidly growing NoSQL unstructured database market.”
Sills initiated coverage in October with a price target of 450 and a buy rating of 45%.
With the increasing adoption of relational artificial intelligence solutions by businesses, Sills highlighted the growing complexity and volume of data applications. He noted, “This should act as a positive catalyst for MongoDB.”
According to a report by Seeking Alpha, Wells Fargo initiated coverage on MongoDB with a buy rating, citing the company’s potential as an artificial intelligence play.
Earnings Outlook
MongoDB is set to announce its earnings for the quarter ending in October on December 5. Analysts, as per FactSet, expect adjusted earnings to soar by 121% year over year to 51 cents per share, with sales projected to increase by 22% to $406 million.
Barclays analyst Raimo Lenschow expressed optimism about MongoDB’s third-quarter performance against conservative guidance. However, he cautioned that the stock has already seen significant gains this year, rising by approximately 13% following strong earnings from competitor Datadog (DDOG) on November 7.
Lenschow emphasized the need for caution, stating that the current performance leaves little margin for error.
In the previous quarter, MongoDB reported adjusted earnings of 93 cents per share, surpassing Wall Street’s estimate of 46 cents. The company also saw a 40% increase in sales to \(423.8 million, exceeding the expected \)394 million.
In a press release in August, MongoDB’s President and CEO, Dev Ittycheria, highlighted the pivotal role of AI in driving the next wave of application development. He emphasized MongoDB’s integrated platform’s ability to meet the requirements of both standard applications and AI-specific programs.
Consolidation Pattern Analysis for MDB Stock
According to MarketSmith, MDB is currently in a consolidation phase with a buy point at 439. If MDB maintains its position for a few more days, the official buy point will be set at 402.70. Traders may consider using 402.70 as an early entry point if MongoDB shows accelerated progress.
The IBD Composite Rating for MongoDB is at its peak, reflecting strong fundamental and technical performance.
Furthermore, MDB shares boast a robust Relative Strength Rating of 98, placing the company in the top 2% for performance over the past year, according to IBD Stock Checkup.
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