What happened
Shares of MongoDB (MDB 3.42%), a cloud computing database company, were sliding today on no company-specific news. Instead, investors appeared concerned about cloud stocks in general today, after Amazon reported disappointing quarterly financial results and weak guidance.
As a result, investors lost some faith in other cloud stocks and MongoDB's shares fell 1.7% as of 3:24 p.m. ET.
So what
Amazon Web Services (AWS) is a leading cloud infrastructure company and its growth is slowing down. Amazon reported its third-quarter results yesterday and AWS sales increased by just 24% from the year-ago quarter, marking AWS' slowest revenue growth since 2014.
Image source: Getty Images.
Investors may be also concerned that Amazon issued revenue guidance for the fourth quarter that was lower than Wall Street's consensus estimate.
While MongoDB's cloud business isn't the same as Amazon's, investors have been generally skeptical of tech stocks lately anyway, so when they see a major cloud company slowing down they're assuming smaller cloud companies will suffer as well.
Now what
MongoDB's share price drop today is a good example of how volatile the market is right now. Investors are trying to determine the health of the economy amid soaring inflation and rising interest rates -- and they're taking any bit of data they can and making investment decisions based on it.
NASDAQ: MDB
Key Data Points
That's why it's a good idea for long-term investors to revisit why they purchased a stock in the first place and evaluate whether anything has fundamentally changed with the company since then.
If it hasn't, then it may be wise to remember that buying and holding great companies for five years or more is one of the best ways to build wealth in the market.
In the meantime, investors will get more information on how MongoDB is doing when the company reports its third-quarter results, which are estimated to be released toward the beginning of December.
