Why MongoDB Stock Skyrocketed Higher Wednesday Morning

Key Points

• MongoDB delivered results that blew past the high end of management's forecast and Wall Street's most bullish estimates.

• The company's strategy is attracting more customers interested in artificial intelligence.

• The valuation is reasonable from an historical perspective.

• 10 stocks we like better than MongoDB ›

Shares of MongoDB (NASDAQ: MDB) charged sharply higher on Wednesday, surging as much as 34.3%. As of 11:47 a.m. ET, the stock is still up 34%.

The catalyst that drove the database-as-a-service provider higher was the company's financial results, which were far better than even the most bullish forecast.

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Blowing past expectations

For its fiscal 2026 second quarter (ended Jul. 31), MongoDB delivered revenue of $591.4 million, up 24% year over year, signaling that its strategy to address the booming demand for artificial intelligence (AI) is paying off. As a result, the company delivered adjusted earnings per share (EPS) of $1.00, compared to a loss per share of $0.70 in the prior-year quarter.

The results blew past management's previous guidance and caught Wall Street off guard. Analysts' consensus estimates were calling for revenue of $554 million and adjusted EPS of $0.67, so MongoDB sailed past even the loftiest expectations.

Further fueling investor enthusiasm was the company's robust customer acquisitions. MongoDB added 2,800 net new customers, with the total growing to 58,300, up 18% year over year.

The company also continues to generate plenty of cash, with operating cash flow of $72.1 million and free cash flow of $69.9 million.

The AI wildcard

Over the past couple of years, MongoDB has been focused on providing its users with the tools they need to use AI. CEO Dev Ittycheria noted that while AI is not yet a "material driver" of the company's growth, he noted that "enterprise uptake of AI is still early." He went on to say that the "real enduring value" will come from custom AI solutions that will transform their businesses, and that MongoDB provides the tools that will help developers prosper.

Management gave investors other reasons to celebrate, as the company raised its full-year forecast for the second consecutive quarter. MongoDB is now guiding for fiscal 2026 revenue of $2.35 billion, or roughly 17% growth. The company also significantly increased its profit outlook to $3.68, up from $3.03 at the midpoint of its guidance. This shows the company is focusing on expanding its profit margins.

MongoDB stock isn't cheap, selling for 11 times sales. However, that's roughly half its average multiple of 20 since the company's IPO in late 2017.

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Danny Vena has positions in MongoDB. The Motley Fool has positions in and recommends MongoDB. The Motley Fool has a disclosure policy.