AI-Stock MongoDB: Is this the new Oracle?

Last Updated: 15. Januar 2024By

Today I would like to focus on a company that I first introduced to you in 2019. Back then, the tech stock was trading at around 150 USD. Today, the stock is worth almost three times as much and the trend is still pointing upwards. No wonder, as the company shines with a unique market position in the growth market of AI (Artificial Intelligence):

MongoDB (WKN: A2DYB1, ISIN: US60937P1066) is a leading database specialist that enables companies to store, process and analyze large amounts of unstructured data in a cloud-based database. In this area, the New York tech company is not the only provider, but the company’s open-source database MongoDB Atlas has clear unique selling points:

Unbeatable competitive advantage: Speed The unbeatable advantage of MongoDB over other established database providers such as Oracle, IBM or Microsoft is its unique technology: Traditional database systems are based on the now less sought-after SQL technology, while MongoDB is based on NoSQL technology. Non-relational databases (NoSQL) have a speed advantage when processing large amounts of data and are also more convenient to handle. Therefore, more and more companies are switching to NoSQL systems. Although MongoDB is not the only provider in this area, it has a leading technological position.

Potential takeover target However, MongoDB not only offers analysis capabilities for data volumes, but also continuously develops new AI-based applications that aim to improve and simplify the handling of data. Therefore, MongoDB’s technology seems to be currently difficult to match by its competitors. Currently, MongoDB has over 46,000 customers in more than 100 countries, including many well-known names such as Toyota, Uber, Expedia, Vodafone, Conrad, Volvo or Bosch.

It is also possible that one of the major database companies will make a takeover offer for the smaller competitor. However, this would require a high premium on the stock price, as otherwise the major shareholders are unlikely to agree. But even if this does not happen, MongoDB is still an absolute top investment.

Impressive growth rates in revenue and profit In the last three years, the revenues of the profitable company have grown on average by +45%. In the third quarter of 2023/24, a revenue growth of +30% to 433 million USD was recorded. Earnings per share increased by a strong +317% to 0.96 USD. The analyst estimates of 406 million USD in revenue and 0.51 USD in earnings per share were clearly exceeded. For the 2023/24 financial year ending in January, analysts expect a revenue increase of +29% to 1.66 billion USD, as well as earnings of 2.91 USD per share. For 2024/25, revenue of 2.02 billion USD (+22%) and earnings of approximately 3.32 USD (+14%) per share are expected.

Stock has been in a new uptrend since the end of 2022 Annual chart of MongoDB stock, source: Aktien Screener

Rapidly growing database disruptor MongoDB stock benefits from strong growth thanks to its innovative database technology. So far, there is not much competition in sight, which means there is a considerable competitive advantage. Some market experts are already talking about the new Oracle. And this is also apparently the case for fund managers, because despite the already quite ambitious valuation, the stock continues to be in the focus of large investors. A takeover is also possible at any time.

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