Adam Hejl
3 min read
What Happened?
Shares of work management platform monday.com (NASDAQ:MNDY) fell 4.7% in the afternoon session after Barclays analyst Raimo Lenschow downgraded the company from Overweight to Equalweight with a price target of $100.00 as reported by Street Insider.
Barclays analyst Raimo Lenschow lowered the rating while holding the price target at $100.00, implying approximately 12% upside from the prior close of $88.96, in research reported by StreetInsider. In a note detailed by TipRanks, Lenschow wrote that while monday.com’s artificial intelligence monetization is gaining traction, it remains in the early innings and is insufficient to counter decelerating growth across the core business. Barclays pointed out that while AI annual recurring revenue is scaling quickly, it currently represents only about 1% of the company’s total ARR.
After the initial drop, the shares shed some of the losses and rose to $84.95, down 4.5% from the previous close.
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What Is The Market Telling Us
monday.com’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 2.9% on the news that market concerns regarding artificial intelligence disruption subsided and enterprise investment highlighted AI as a business growth enabler across the software industry. According to CNBC, software stocks roared back in the third quarter as fears that artificial intelligence would disrupt traditional business models faded. The iShares Expanded Tech-Software Sector ETF rose 17% in the quarter, and cybersecurity stayed a bright spot, with CrowdStrike up 39% as more powerful AI reinforced the need to protect companies.
CNBC has also reported that CrowdStrike and Palo Alto Networks rose 95% and 113% from April through June, their best quarter on record, as autonomous AI agents fueled demand for cybersecurity.Peer commentary reinforced that on Tuesday. Zscaler reaffirmed its fiscal 2027 annual recurring revenue target of $4.396 billion to $4.426 billion and its longer-term goal of $10 billion in ARR. Chief Executive Officer Jay Chaudhry told CNBC’s Squawk Box the company is still seeing that demand as enterprises secure AI.
