The battle for supremacy in artificial intelligence continues to heat up. Alphabet (GOOGLE) has the Bard chatbot and Microsoft (MSFT) features Bing powered by ChatGPT. Now, 2021 IPO Monday.com (MNDY) has its own plans to deepen AI into its productivity platform, fueling a new market zone for MNDY stock.
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Monday.com pales in size, of course, compared to Magnificent Seven MSFT and Google stocks. But the Israeli cloud-based business software company is earning a place in the IPO Leaders. MNDY stock also joins Microsoft in both the IBD Breakout Stocks Index and IBD 50.
Growing faster than established tech titans like Alphabet and Microsoft, Monday.com has a track record of impressive revenue gains. Over the past five quarters, Alphabet posted sales growth ranging from 1% to 11%, as Microsoft reported quarterly revenue gains of 2% to 13%.
During the same period, Monday.com saw gains ranging from 38% to 65%, although growth has slowed in recent reports. The provider of work management application tools generated revenue of $189.2 million in the third quarter, a 38% gain over the same quarter last year.
As is often the case with promising IPOs with strong sales, profits have now started to rise.
See who’s participating in MNDY and MSFT in the IBD Breakout Stocks Index
Monday.com Boosts Profit Growth
Ahead of its third-quarter earnings report on Nov. 13, Monday.com posted strong earnings growth ranging from 115% to 269%. But those gains were based on loss-making quarters a year earlier.
In its third quarter report, the new company showed that its recovery was no fluke, generating a whopping 1,180% EPS gain at 64 cents per share. For the fourth quarter, analysts are predicting a 985% increase in earnings.
This performance attracted institutional demand. Monday.com has an A+ Accumulation/Distribution Rating, indicating large purchases by mutual funds and other large investors over the past 13 weeks.
Continued demand shows that Monday.com, like other Israeli tech companies Mobileye Global (MBLY) and CyberArk Software (CYBR), rebounded strongly after the October 7 terrorist attacks by Hamas.
Monday.com: Partner with 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 company works with customers in a variety of fields, including Marketing, Sales, HR, Product Development and more.
Monday.com works with and integrates with a wide range of companies, including Microsoft, Google, Zoom Video communications (ZM), HubSpot (HUBS) And much more.
Earlier this year, Monday.com launched with it Sales CRM for Microsoft Teamsaimed at increasing efficiency for customer-facing teams.
Monday.com also has integrations with Google for Gmail and Google Drive.
AI Monday: Content Creation and Beyond
Through its open platform Monday AI, the company enables customers to build any kind of AI application. Still in beta and with more applications to come, uses range from sentiment analysis to customer experience (CX) chatbots and content creation.
For example, Monday AI can be used to create a blog post about marketing, write a sales email, and calculate an annual 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 future releases, third-party developers will leverage the same infrastructure to build their own apps using Monday’s AI technology. These new apps will be available to customers through the app market.
MNDY Stock Joins MSFT, GOOGL on Breakout Watch
Building on an uptrend for several days of high volume, MNDY stock is now trading just above the 179.62 buy point. The chart pattern is an early double bottom stage. The second bottom is much larger than the first, making this an unusual double bottom.
In a sign of improving technical strength after a volatile period, the 21-day EMA has broken above the longer-term 50-day line.
In a clear sign of market leadership, the relative power line for Monday.com shot higher, pushing it to the right around a 52-week high.
As the IPO Leader climbs, MSFT stock continues to build on its breakout earlier this month, now trading at the top of its buy range. Google stock has formed a buy point of 141.22, but it may complete a manipulation to offer an earlier entry.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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