Database solution provider MongoDB (MDB) continues to stand out as one of the few software companies delivering both high growth and a clear path to profitability. The company delivered a blockbuster Q2 in late August, helping the stock price to break through the $300 barrier. Moreover, prices have consolidated since then. Shares are up more than 40% year-to-date, yet I believe the long-term upside remains intact.
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The company’s latest “investor session”, held last month, bolstered my confidence in its growth trajectory, with new product launches, expanding enterprise adoption, and conservative long-term financial targets that leave room for meaningful upside.
Atlas Drives the Core Growth Engine
MongoDB’s cloud platform, Atlas, now represents roughly 71% of total revenue, cementing its role as the primary driver of the company’s growth. Subscription revenue, which makes up nearly 97% of total sales, rose 23% year-over-year in Q2 2026, well above the 13% growth posted in the same period last year. Possibly most importantly of all, MDB’s ability to attract large-tier clients continues to bear fruit, with the company now boasting almost 2,500 customers spending over $100,000, according to TipRanks data.
Atlas consumption remains robust, with sequential acceleration in new revenue contribution — $181 million added in the first half of fiscal 2026, compared with $151 million in the second half of fiscal 2025. MongoDB’s product-led growth strategy is proving efficient, with 25% of customers generating $1 million or more in annual recurring revenue (ARR) originating from self-serve channels. Those customers reach scale roughly 15% faster than sales-only cohorts.
Ongoing growth priorities include embedding AI features, advancing queryable encryption for regulated workloads, and expanding sales coverage across new regions and verticals. Atlas’s consumption-based model provides resilience, making MongoDB less dependent on large, one-time enterprise deals and more capable of sustaining stable revenue during macro slowdowns.
New Tools and a Clear Long-Term Plan
MongoDB’s 2025 investor session offered an in-depth look at its evolving AI strategy and long-term framework. Adoption of MongoDB 8.0 has already surpassed expectations, with more than 66% of Atlas clusters running the latest version. The recently launched 8.2 release introduces additional performance gains, while Queryable Encryption continues to be a critical differentiator for customers in highly regulated industries.
The highlight of the event was the introduction of the Application Modernization Platform (AMP) — an AI-powered tool designed to automate and accelerate the migration of legacy relational databases to MongoDB. Early tests have shown migration times improving by as much as 90%, with customers reporting 2–3x faster modernization projects.
The AMP platform directly addresses one of the biggest bottlenecks in enterprise IT — the cost, complexity, and risk of modernizing mission-critical systems. By simplifying migrations through AI-driven automation, MongoDB can make it easier for large enterprises to adopt its platform, positioning it as an essential player in the modernization and AI infrastructure ecosystem.
Conservative Targets Leave Room for Upside
For the first time, MongoDB outlined long-term financial targets that many analysts viewed as deliberately conservative. Management projects the following:
- 20%+ Atlas growth over the next three to five years
- 100–200 basis points of annual operating margin expansion toward a long-term target above 20%
- 80%+ free cash flow conversion from operating income
Total revenue growth is expected to average in the high teens, to restore the company’s Rule of 40 performance metric — the sum of revenue growth and operating margin — in the coming years.
I believe these targets significantly understate MongoDB’s potential. Atlas continues to see accelerating adoption, while the AI-driven modernization trend could easily push growth above management’s “base case.” With only about 2% market share of an estimated $150 billion database market by 2028, MongoDB has significant headroom for expansion.
AI is the Next Frontier
MongoDB is strategically positioning itself at the intersection of databases and artificial intelligence (AI). Management views OLTP (Online Transaction Processing) as the “strategic high ground” for AI inference workloads—a space that demands ultra-fast data storage and retrieval, where MongoDB already excels.
Today, approximately 30% of Atlas’ annual recurring revenue (ARR) comes from customers deploying at least one AI use case. The rise of generative AI has significantly expanded the database market, now estimated at $100 billion and growing roughly 13% annually. Thanks to its flexible, document-based architecture, MongoDB is particularly well-suited to handle the unstructured data that fuels AI models—an area where traditional relational databases often fall short.
While AI monetization will take time to fully play out, MongoDB’s AI roadmap—anchored by its AMP platform and data model flexibility—positions the company with a strong and durable competitive edge. Over time, AI is expected to act as both a growth driver and a margin catalyst as adoption and usage continue to scale.
MDB’s Premium Valuation Backed by Growth and Profitability
MongoDB’s valuation remains elevated, but I believe it’s justified by its durable growth profile and expanding profitability. The company trades at a P/E of 72.5x, far above the sector median of 24.9. Its EV/Sales ratio stands at 10.8 versus a peer median of 3.8, and its Price/Cash Flow multiple of 97 compares with a median of 19.6. All solid figures make the stock a relatively strong contender among its peers.
Based on my 12-model valuation framework — including P/E multiples, EV/EBIT, and a five-year DCF Revenue Exit — I estimate a fair value of $280, implying about 12% downside from current levels.
Is MongoDB a Good Stock to Buy?
According to leading Wall Street analysts tracked by TipRanks, MongoDB carries a Strong Buy consensus rating, based on 33 analyst reviews: 27 Buys, 6 Holds, and no Sells. MDB’s average stock price target stands at $359.58, implying just over 10% upside over the coming 12 months.
Analysts broadly agree that MongoDB’s platform-led approach, sticky customer base, and expanding AI capabilities position it as one of the best long-term compounders in enterprise software.
Bullish on Durable Growth and AI Execution
MongoDB’s combination of strong Atlas adoption, expanding margins, and strategic AI investments positions it for sustained long-term growth. Meanwhile, its new Application Modernization Platform (AMP) and conservative long-term targets provide a solid foundation for future upside. Lastly, its 2% market share highlights just how much spare capacity into which to scale.
Yes, the valuation is rich — but in my view, MongoDB deserves its premium. As Atlas continues to expand and AI use cases grow, MDB’s growth story is far from over. For investors looking for exposure to a high-quality, AI-enabled data infrastructure leader, MongoDB remains a compelling buy.