The battle for supremacy in artificial intelligence continues to heat up. Alphabet has the Bard chatbot and Microsoft has Bing powered by ChatGPT. Now, 2021 IPO Monday.com has its own plans for more deeply weaving AI into its productivity platform, fueling a new buy zone for MNDY stock.
Monday.com pales in size, of course, compared to Magnificent Seven stocks MSFT and Google stock. But the Israeli cloud-based enterprise software firm earns a spot on the IPO Leaders. MNDY stock also joins Microsoft on both the IBD Breakout Stocks Index and the IBD 50.
Growing faster than entrenched tech titans like Alphabet and Microsoft, Monday.com has a track record of impressive revenue gains. Over the last five quarters, Alphabet has posted sales growth ranging from 1% to 11% as Microsoft reported quarterly revenue gains of 2% to 13%.
During the same period, Monday.com has seen top-line gains ranging from 38% to 65%, although growth has slowed in recent reports. The provider of work management apps tools generated $189.2 million in revenue in Q3, marking a 38% gain over the prior-year same quarter.
As often happens with promising IPOs with strong sales, earnings have now started to kick in.
See Who Joins MNDY And MSFT On The IBD Breakout Stocks Index
Monday.com Ramps Up Earnings Growth
Prior to reporting third-quarter earnings on Nov. 13, Monday.com posted powerful earnings growth ranging from 115% to 269%. But those gains were based on prior-year quarters that showed a loss.
In its Q3 report, the young company showed that its turnaround was not a fluke, generating a whopping 1,180% EPS gain to 64 cents a share. For Q4, analysts forecast 985% earnings growth.
That performance has attracted institutional demand. Monday.com sports an A+ Accumulation/Distribution Rating, showing heavy buying by mutual funds and other large investors over the trailing 13 weeks.
Continued demand shows that Monday.com, like fellow Israeli tech firms Mobileye Global and CyberArk Software, has rebounded strongly following the Hamas terrorist attacks on Oct. 7.
Also of note is how fellow enterprise software stock Workday has just gapped up into buy range on earnings.
Monday.com: Partner To The Stars Like Google, Microsoft
With offices in Tel Aviv, New York, Miami, Chicago, Denver, London, Warsaw, Sydney, Melbourne, Sao Paulo and Tokyo, Monday.com has already established a global footprint. Through its workflow automation and productivity platform, the enterprise software firm works with clients across a range of fields, including Marketing, Sales, HR, Product Development and beyond.
Monday.com collaborates and integrates with a wide range of firms, including Microsoft, Google, Zoom Video Communications, HubSpot and many more.
Earlier this year, Monday.com went live with its sales CRM for Microsoft Teams, aiming to increase efficiency for customer-facing groups.
Monday.com also has integrations with Google for Gmail and Google Drive.
Monday AI: Content Generation And Beyond
Through its open platform Monday AI, the company enables clients to build any kind of AI app. Still in beta and with more apps to come, uses range from sentiment analysis to customer experience (CX) chatbots and content generation.
For example, Monday AI can be used to generate a blog post for Marketing, compose a prospect email for sales, and calculate a yearly budget for the operations team.
The apps currently available were built internally at Monday.com by a few different teams on a shared infrastructure. In upcoming versions, external developers will leverage the same infrastructure to create their own apps using Monday AI technology. These new apps will be available to customers through the app marketplace.
MNDY Stock Joins MSFT, GOOGL On Breakout Watch
Building on several days of heavy volume on the upside, MNDY stock is now testing a 179.62 buy point. The chart pattern is an early stage double bottom. The second bottom is much longer than the first, making this an unusual double bottom.
As the Nasdaq reversed lowerWedneday, Monday.com also retreated. Volume spiked as the stock retreated below the buy point.
Yet in a sign of improving technical strength after a choppy period, the 21-day exponential moving average has crossed back above its longer-term 50-day line.
Still showing market leadership, the relative strength line for Monday.com remains within striking distance of a 52-week high.
As the IPO Leader rises, MSFT stock continues to build on its breakout earlier this month, now trading near the top its buy range. Google stock has formed a 141.22 buy point, but may complete a handle to offer an earlier entry. Both Magnificent Seven stocks fell Wednesday along with the Nasdaq.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
