What happened
Shares of MongoDB (MDB -1.39%) rose 6.9% on Friday, following an analyst upgrade.
So what
UBS analyst Karl Keirstead lifted his rating on MongoDB's stock from neutral to buy and boosted his price forecast from $345 to $450. If he's correct, shareholders could enjoy gains of roughly 13% from the stock's current price near $398.
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MongoDB's shares have surged more than 40% since the database software leader delivered strong fiscal 2022 fourth-quarter financial results on March 8. MongoDB's revenue soared 56% year over year to $266.5 million, driven by 85% growth in its Atlas cloud data platform.
Yet despite the stock's steep ascent, Keirstead sees more gains ahead for investors. He argues that the market is still underappreciating the impact of customers beginning to use MongoDB's database tools for more complex tasks, which have traditionally been the domain of rivals like Oracle and Microsoft. He also believes that MongoDB is holding its own against database solutions offered by cloud computing titan Amazon.com.
Now what
MongoDB's recent strategic collaboration agreement with Amazon Web Services (AWS) supports Keirstead's view. The two companies agreed on Tuesday to work together to make it easier for companies to shift their database processes to the cloud. If AWS was rapidly taking share from MongoDB, there would have been little reason for the two rivals to strike a partnership deal.
It's more likely that Amazon realized MongoDB is proving popular with developers, and the cloud giant chose to lend its support to a top-tier service provider that's driving increased workloads to its AWS infrastructure platform. If that's the case, it bodes well for MongoDB's continued expansion.
