BofA Cuts monday.com (MNDY) to Neutral, Citing Google AI Overviews Risk

monday.com Ltd. (NASDAQ:MNDY) is one of the Hot AI Stocks to Keep on Your Radar. On August 21, BofA Securities analyst Michael Funk downgraded the stock from Buy to Neutral with a price target of $205.00 (from $240.00).

The downgrade follows an in-depth review of Monday.com’s web traffic by marketing channel which has highlighted increasing risks from Google’s integration of AI Overviews into search results. These are eroding the company’s web traffic and posing a threat to its self-serve business model.

“According to Similarweb, search engine optimization (SEO) driven website visits to Monday.com sank by an avg of 23.5% Y/Y in 2Q25 – and Y/Y declines accelerated to -25.3% in July. Mounting headwinds are likely driven by Google’s expanding integration of AI Overviews into search results. Given that <30% of total signups come through Google, we introduce a proprietary framework leveraging Similarweb data to quantify potential impact to growth."

"Our conclusion is that, despite recent pressure on shares (-30% since 2Q25 earnings), fundamental challenges and a potentially gnawing AI search disruption bear narrative make risk/reward balanced from here. We are not predicting a ’25 rev guide miss, but trim our ’26 rev estimates and lower our PO to $205 (6.2x EV/26E Revs, down from $240/7.5x).”

monday.com Ltd. (NASDAQ:MNDY) develops software applications globally, offering a cloud-based Work OS for creating work management tools.

While we acknowledge the potential of MNDY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Must-Watch AI Stocks for Investors and 10 AI Stocks Analysts Are Tracking Closely

Disclosure: None.