The Nasdaq Composite's (^IXIC +0.01%) sell-off deepened Monday as investors' worries about the state of the U.S. economy pushed the index deeper into correction territory. But as Nasdaq stocks have fallen, some now look like bargains.
One of these is tech giant MongoDB (MDB 0.43%). Its shares hit a 52-week low of $173.13 on March 10, and through that date, the stock is down 23% in 2025. MongoDB's plunge is a dramatic turnaround from the 52-week high of $387.19 reached last May. Wall Street's fears of economic doom from President Donald Trump's tariff plans is a factor in the stock's slump, but that's not the whole story.
With shares hovering near a 52-week low, is now the time to scoop up MongoDB stock? Answering that question requires unpacking where the company is now.
NASDAQ: MDB
Key Data Points
Why MongoDB stock is down
MongoDB focuses on software solutions for database management. Databases are storehouses for digital information, and they are increasingly important in the era of artificial intelligence (AI). That's because AI systems draw on the mountains of data saved in databases to execute tasks.
AI's growing adoption contributed to MongoDB's strong performance in its fiscal 2025, which ended Jan. 31. Sales grew 19% year over year, enabling the company to cross the $2 billion mark. But then management forecast fiscal 2026 revenue to come in around $2.2 billion. This slowdown in revenue growth was a red flag for Wall Street, leading to MongoDB's sell-off.
The anticipated sales slowdown was attributed to one of the two main parts of its business. MongoDB's database solutions come in two flavors, a cloud-based platform called Atlas and an enterprise offering that provides large customers with the option to set up databases on premises, in the cloud, or a hybrid of both.
The fiscal 2026 forecast estimated its non-Atlas revenue to fall "in the high-single digits for the year," according to interim CFO Serge Tanjga. He said that was due to the limited number of enterprise customers MongoDB can pursue.
MongoDB's strengths
That said, the company's Atlas product has no such limitation, and it's doing well. At the end of fiscal 2025, Atlas customers totaled more than 53,000, an increase from the prior year's 46,300 clients. This growth contributed to Atlas sales rising 24% year over year in fiscal 2025.
The success of Atlas is important because it represented 71% of MongoDB's $548.4 million in revenue during the fiscal fourth quarter. Seeing Atlas sales soar is key to MongoDB's long-term success. Adding to this is the growing AI market.
CEO Dev Ittycheria said on the company's recent earnings call, "AI is transforming software from a static tool into a dynamic decision-making partner." For this to happen, a company's database must be able to adapt, but, according to Ittycheria, "legacy systems simply cannot keep up."
This scenario provides an opportunity for MongoDB to attract customers and grow revenue, since its platform is designed for the flexibility AI needs.
To bolster its AI advantages further, the company acquired Voyage AI, which specializes in ensuring artificial intelligence delivers accurate, trustworthy results. Ittycheria believes this can be a key differentiator for MongoDB. He said one of the biggest problems the industry faces is the "hallucinations" AI can produce -- information that's misleading or even made up entirely.
Other reasons to consider MongoDB stock
Along with its AI strength, MongoDB boasted an excellent balance sheet. The company exited fiscal 2025 with $3.4 billion in total assets compared to $648.1 million in total liabilities. It also has no debt.
Moreover, its stock valuation is the lowest it's been in years. Here's a look at MongoDB's price-to-sales (P/S) ratio, which measures how much investors are willing to pay for every dollar of revenue, compared against some of its biggest competitors in the database space, Oracle and Microsoft.
Data by YCharts.
MongoDB's P/S ratio was above its larger rivals for years, suggesting shares were overvalued. With the company's recent decline in stock price, its P/S ratio is the lowest of the three at the time of writing. This makes its shares attractively priced now.
Its expanding Atlas business, AI growth potential, and solid balance sheet are reasons that make MongoDB a good investment for the long-term investor. With its share price drop, now you can grab shares at a compelling valuation as well.
