Wednesday's IBD 50 Stocks To Watch pick, AI stock leader MongoDB, is one of the best stocks to buy and watch right now, with company earnings surging 180% in the latest quarter. MDB stock traded 2% lower midday Wednesday, near its recent lows.
New York-based MongoDB provides an open-source database platform for businesses. It has a subscription-based software-as-a-service business model.
On June 2, MongoDB soared 28% after the company reported a 180% surge in quarterly profit to 56 cents a share vs. the year-ago period. Revenue increased 29% to $368.3 million.
"We believe the recent breakthroughs in AI represent the next frontier of software development," said CEO Dev Ittycheria in the earnings report press release.
Ittycheria continued, "The move to embed AI in applications requires a broad and sophisticated set of capabilities while enabling developers to move even faster to create a competitive advantage. We are confident MongoDB's developer data platform is well positioned to benefit from the next wave of AI applications in the years to come."
MongoDB Earnings Surge
With huge earnings growth in the latest quarter, but no long-term track record of profitability, MDB stock shows an 83 out of a perfect 99 Earnings Per Share Rating, according to IBD Stock Checkup. This rating takes into account EPS growth and stability of earnings over the past three years. The two most recent quarters are weighted more heavily.
MDB stock boasts a perfect 99 IBD Composite Rating due to strong fundamentals in the latest quarter, along with powerful price action in recent months. The IBD Composite Rating is designed to help investors easily gauge the quality of a stock's fundamental and technical metrics.
MDB ranks No. 1 in IBD's Computer Software-Database industry group.
AI Stock Leader Is One Of Best Stocks To Buy And Watch
Following the AI stock leader's June 2 earnings-fueled gap up, MongoDB is trading tightly, offering a new entry, per IBD MarketSmith chart analysis. The three-weeks-tight formation shows a buy point at 398.89, while aggressive investors could use a trendline-entry around 386.
MBD stock boasts a powerful relative strength line, reiterating that it is a stock market leader to watch. Remember, the RS line measures a stock's price performance vs. the S&P 500 and is the blue line plotted on every IBD chart.
This AI stock has more. Strong fundamentals and technicals in recent quarters make MDB one of the best stocks to buy and watch in today's stock market.
With the stock market in a confirmed uptrend, investors should be on the lookout for top stocks breaking out of basing patterns. Amid Wednesday's stock market drop, IBD recommends exposure in stocks at 60% to 80% of your portfolio, according to IBD's The Big Picture.
Best Stocks To Buy And Watch
Three recent IBD 50 Stocks To Watch picks, which are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Shoals Technologies | 25.00 | Trendline | |
| Ryanair | 108.90 | Tight area | |
| Shift4 Payments | 69.00 | Trendline |
Source: IBD Data As Of June 21
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
