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MongoDB Rebounds Sharply as Atlas Cloud Growth Fuels Bullish Forecast

MongoDB (MDB) stunned Wall Street this week with a fiscal first-quarter earnings report that beat expectations and reset the tone for fiscal year 2026. 

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Shares jumped more than 17% in early trading Thursday, erasing much of the year-to-date decline that had seen the stock down roughly 15% after a brutal 43% drop in 2024. Fueling the rebound: a return to strong growth for its flagship cloud platform, Atlas.

Revenue for the quarter climbed 21.9% year over year to $549 million, about $22 million more than analysts expected. Much of that upside came from Atlas, MongoDB’s cloud database service, which generated $395 million in sales—an annual increase of 26%. The platform now makes up nearly three-quarters of total company revenue and added a record 2,700 customers in the quarter, lifting the company-wide total to 57,100.

This performance sharply contrasted with the company's cautious tone last quarter, when MongoDB warned of a possible slowdown in Atlas and projected flat to modest growth. Investors had braced for disappointment, especially after a one-time $50 million boost from multiyear contracts in its previous Q4 proved nonrecurring. But instead, Atlas growth reaccelerated and renewed confidence in the company’s long-term strategy.

Raised Forecast and $800 Million Buyback Send Strong Signals
The earnings surprise came with more good news. MongoDB raised its full-year forecast, projecting revenues of roughly $2.27 billion and adjusted earnings per share of $3.03 at the midpoint—both well above prior estimates. Management also announced an $800 million expansion of its share repurchase program, underscoring confidence in the company’s cash generation and stock valuation.

Behind the improved profitability are stronger operating margins and disciplined spending, now overseen by new CFO Mike Berry, who officially joined on May 27. The company’s free cash flow surged 74% to nearly $106 million in the quarter, a sign that despite still posting a GAAP loss of $0.46 per share, MongoDB’s underlying business is becoming more efficient and sustainable.

Atlas’s scalable model and higher margins compared to legacy services helped improve overall financial health. Non-Atlas revenue—primarily from Enterprise Advanced—also came in ahead of forecasts at $136 million, though it is expected to decline in the high single digits going forward as MongoDB continues shifting toward cloud-first offerings.

AI Ambitions and Analyst Confidence Boost Long-Term Outlook
Wall Street responded with a wave of upgrades and renewed bullish calls. Wedbush reiterated its “Outperform” rating with a $300 price target, citing MongoDB’s growing role in modernizing legacy systems and rising demand tied to artificial intelligence (AI) workloads. The firm also highlighted the company’s recent acquisition of Voyage AI and launch of new AI tools, such as the Model Context Protocol (MCP) Server, which are designed to make Atlas more attractive to enterprises building AI applications.

Morgan Stanley raised its target to $255, while BofA Securities reaffirmed its $275 target, all pointing to the stronger-than-expected performance and momentum. Analysts were particularly encouraged by Atlas’s broad-based adoption across geographies and use cases, along with stabilization in usage patterns and customer spend.

MongoDB’s AI strategy remains in its early stages, with management noting that AI workloads are contributing only modest revenue for now. But its investments in infrastructure and product development suggest the company is positioning itself to capture future demand as enterprises scale up their AI initiatives. Analysts estimate the broader unstructured data market, which MongoDB serves, is worth over $120 billion.

Conclusion: MongoDB Turns a Corner, But Execution Will Be Key
MongoDB’s fiscal Q1 marked a crucial turning point for a stock that had fallen out of favor. The impressive rebound in Atlas growth, raised full-year guidance, and expanding free cash flow suggest a company that is not only stabilizing, but reaccelerating. Coupled with a large share buyback and growing enterprise traction, MongoDB has once again become a name to watch in cloud and data infrastructure.

While GAAP profitability remains elusive, MongoDB’s improving margins, strategic AI investments, and strong customer momentum point to a business on firmer footing. For investors, the focus now shifts to whether the company can sustain Atlas’s growth trajectory in Q2 and maintain operating discipline as it chases long-term AI opportunities.


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