MongoDB Roars Back to Life: It’s Not Too Late to Buy More
Doubters of MongoDB’s (NASDAQ: MDB) premier position in the AI ecosystem have been proven wrong.
The FQ2 earnings were so good that they sparked a 30% increase in the share price, and there is still ample upside ahead.
The critical takeaway is that this company is accelerating its business, driven by the implementation of AI and its utility to technology developers across sectors, industries, and verticals.
Market Forces Align: A 50% Upside for MDB Ahead
Short interest is unlikely to be a significant factor in the post-release move, which is good news for investors. While up slightly in August, short interest is down significantly compared to last year, trending near record lows.
This suggests the downtrend in place since early 2024 ended earlier in 2025. With this in play, the release-driven rally is likely to be fueled by genuine buyers, rather than short-covering activity.
Likewise, the institutions that sold aggressively in Q1 reverted to buying in Q2 and continued the trend into Q3, providing a solid support base for this market. Buying activity is broad-based, encompassing public and private wealth managers and retirement, ETF, and mutual funds, which provide a robust tailwind, given the high institutional ownership rate of approximately 90%.
And the analyst trends, which are unlikely to change now, align with an outlook for rising share prices. The analysts' price target reductions were a key factor in the stock price decline in 2024 and early 2025; however, they reverted to bullish activity mid-year and are now leading the market.
The analysts' trends as of late August include steadily increasing coverage, up 46% in the preceding 12 months, and a firming sentiment, with Sell ratings transitioning to Holds and Buys. The bias in sentiment is bullish due to the high number of Buy and Strong Buy ratings, approximately 75%, and the trend in price target revisions.
The consensus reported by MarketBeat is down compared to last year but rising compared to the prior month and quarter, with recent revisions leading to the high-end of $430. That’s worth 50% in addition to the 30% pop sparked by the Q2 release.
MongoDB Accelerates Atlas Growth: Guides Higher After NVIDIA-Like Quarter
It took some time for AI to focus on app development and implementation, but it did. MongoDB’s Q2 results were NVIDIA-like, including robust 24% revenue growth, 680 basis points of outperformance, margin strength, and hot guidance.
The results were driven by accelerating demand for Atlas, the company’s AI-enabled platform, which grew by 29% to represent 74% of the net. Subscriptions and Services were strong, up by 23% and 33% respectively, and are expected to continue driving growth for the foreseeable future.
The margin news is mixed. The gross margin contracted slightly but was offset by a significant improvement in operating leverage and business health. The critical details include a 65% increase in adjusted operating income, a nearly 50% increase in adjusted EPS, and approximately 5,000 basis points of outperformance, in addition to positive free cash flow.
Regarding the guidance, the company provided revenue and earnings projections within a range, with the low-end 220 and 1700 basis points above MarketBeat’s reported consensus figures. There is a high probability that acceleration will continue, and the guidance is likely too low.
MongoDB’s balance sheet highlights its business strength and why it is a good long-term investment. The cash-flow-producing business increased its cash and assets while reducing liabilities, resulting in a 3.2% increase in equity, despite increasing treasury shares.
As it stands, MDB is well-capitalized and in fortress-like condition, capable of investing in its growth and driving value gains for investors.
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