MongoDB Inc (NASDAQ:MDB) will release its third quarter results on Monday aftern the bell, with Wedbush analysts expecting it report another solid quarter as the document database company capitalized on heightened demand for its AI offerings.
The firm maintained an ‘Outperform’ rating and a $400 price target, keeping MongoDB on its IVES AI 30 List and Best Ideas List, noting the company is in the early stages of a multi-year growth trajectory.
Shares of MongoDB traded hands at $330 on Wednesday afternoon, up 42% in the year to date.
Wall Street analysts on average forecast $593.9 million in revenue for Q3, which Wedbush believes is conservative.
“Atlas consumption metrics are still in the early stages of re-accelerating with more customers realizing the value from the MDB platform,” they wrote.
The company’s recent product launches, highlighted during its September investor day, further support the expectation that MongoDB will continue adding customers to its ecosystem, helping enterprises reduce risks, costs, and time associated with migrating legacy applications.
Across industries, organizations are increasingly looking to implement custom AI applications, but many are encountering challenges with enterprise-grade deployments due to limits on flexibility, scalability, and performance.
Wedbush notes that MongoDB is gaining ground as “more customers have hit a wall with updating their databases and infrastructure to prepare for improving platforms with AI integrations.”
They added that AI-native companies are increasingly selecting MongoDB as the standard for AI applications, while enterprise deployments through Atlas are still in the early stages, signaling potential incremental share gains.
At the investor day, MongoDB released MongoDB 8.2, with a key focus on query encryption to address enterprise AI integration concerns related to data exposure.
“Query encryption closes the loop with a fully integrated database that operates when data is at rest, in transit, or in use,” the analysts highlighted. The update also introduces features that enhance developer productivity and expand the platform’s applicability across sensitive sectors, including technology, government, healthcare, and telecommunications.
Wedbush also pointed to the success of MongoDB’s self-serve strategy, which targets developers new to the platform and helps accelerate adoption among mid-market and enterprise clients.
“With 80% of developers being new to MDB, the self-serve motion is a highly effective way to land within the developer community then move upmarket, leading to a 15% faster time to reach $1 million+ in ARR from its self-serve channel,” the analysts wrote.
Atlas currently represents an approximately $2 billion annual revenue business, but Wedbush believes MongoDB has only approximately 2% market share within this $100 billion+ opportunity, with substantial room to grow as AI use cases expand across the mid-market and enterprise segments.