MDB Shares Jump 39% YTD: Should You Add the Stock to Your Portfolio?

MongoDB MDB shares have advanced 38.9% year to date, outperforming the Zacks Computer and Technology sector’s appreciation of 22.3% and the Zacks Internet Software industry’s growth of 26.5%. The developer data platform’s strong momentum is supported by accelerating Atlas adoption and expanding use cases in artificial intelligence-driven workloads.

MDB’s YTD Performance

Atlas Platform Drives Growth and Enterprise Adoption

MongoDB’s Atlas cloud database transforms enterprise data management by automating operations, scaling and disaster recovery, while enabling global distribution with sub-100 millisecond latency. Its document-based architecture eliminates complex object-relational mapping, lowering costs and speeding development. Unlike SNOWFLAKE ’s SNOW analytics-focused storage, Atlas is optimized for operational workloads requiring millisecond response times.
This operational superiority translates into exceptional financial performance, with Atlas revenues growing 29% year over year to $438.97 million in the second quarter of fiscal 2026. The Zacks Consensus Estimate for fiscal third-quarter Atlas revenues is pegged at $455.82 million, indicating year-over-year growth of 25.7%. Atlas represents 74% of total revenues, up 3% year over year, reflecting broad adoption across Microsoft’s MSFT Azure and Amazon’s AMZN AWS. 

Enterprise traction remains robust, with over 70% of Fortune 500 companies using MongoDB, including seven of the 10 largest banks. Deutsche Telekom shifted 30 million customer records to Atlas, achieving 15 times higher login capacity than legacy systems. Atlas customers increased 19% year over year to 58,300 in the fiscal second quarter, with the Zacks Consensus Estimate for the fiscal third quarter pegged at 59,906, indicating a 17.5% year-over-year rise. Integration with Microsoft and Amazon extends beyond hosting to include identity management, monitoring and data lake services, reinforcing Atlas’ enterprise positioning.

AI Positioning Fuels Long-Term Growth

Artificial intelligence is emerging as a structural growth driver. Atlas’ JSON model and integrated vector search allow enterprises to build AI applications without additional niche databases, a capability crucial for real-time inference. Unlike Snowflake, which is centered on analytical workloads, MongoDB is positioned to power operational AI.

Adoption is visible with a leading electric vehicle manufacturer selecting Atlas for its autonomous driving platform, now managing more than one billion, with 10x growth expected. DevRev is also building its agentic platform on MongoDB, relying on Atlas to process billions of monthly requests more efficiently than assembling separate tools. The Voyage AI acquisition expands Atlas’ embedding and reranking capabilities, strengthening its competitiveness in AI-native workloads.

AI demand is beginning to influence platform adoption. While revenue contribution is still at an early stage, enterprises are steadily moving from pilots to production-scale deployments. MongoDB expects rising AI-related demand to drive Atlas adoption further, with Microsoft Azure and Amazon AWS integrations enabling enterprises to consolidate workloads seamlessly. As enterprises expand AI deployments, MongoDB’s ability to manage real-time operational data offers a broader opportunity than Snowflake’s more analytics-oriented approach.

Operating Leverage Strengthens Profitability

MongoDB demonstrates exceptional operational leverage with non-GAAP operating margin expanding to 15% in the second quarter of fiscal 2026 from 11% in the prior-year period, while maintaining aggressive research and development investments. This margin expansion occurred alongside revenue growth acceleration, proving the business model’s scalability differs from typical high-growth software companies still prioritizing growth over profitability. Free cash flow turned positive at $69.9 million compared to negative $4 million a year ago, with operating cash flow reaching $72.1 million versus negative $1.4 million previously.

MDB raised fiscal 2026 operating margin guidance to 14% while increasing revenue expectations to $2.34-$2.36 billion, up 17.5% year over year, demonstrating confidence in sustainable profitability expansion. The Zacks Consensus Estimate for the third-quarter fiscal 2026 earnings is pegged at 78 cents per share, up 9 cents over the past 30 days. While this still indicates a 32.76% decline from the prior-year quarter, upward estimate revisions highlight improving sentiment toward MongoDB’s ability to expand profitability even as it invests in growth. With Atlas now driving a greater share of subscription revenues and carrying structurally higher gross margins, MongoDB is expected to achieve margin expansion at a pace that outperforms the broader software industry.

MongoDB, Inc. Price and Consensus

MongoDB, Inc. price-consensus-chart | MongoDB, Inc. Quote

Valuation Consideration

MongoDB currently trades at 10.38X forward 12-month sales, well above the Zacks industry’s 5.98X and the broader Zacks sector’s 7.09X. The premium reflects investor confidence in MongoDB’s above-industry revenue growth, expanding operating margins and rising cash generation. With a cash balance of $2.3 billion, MDB has ample flexibility to fund strategic acquisitions and product innovation, while positive free cash flow trends reinforce the sustainability of its model. As Atlas continues to increase its share of revenues and profitability scales, MongoDB’s valuation premium appears well supported.

MDB’s Valuation

Conclusion

MongoDB’s strong year-to-date share price performance reflects the company’s ability to combine accelerating Atlas adoption, growing traction in artificial intelligence workloads and expanding operating leverage. With fiscal 2026 guidance pointing to sustained revenue and margin growth, and with a solid cash balance providing flexibility for innovation and acquisitions, the company is positioned for durable expansion. The stock trades at a premium to both the Zacks industry and sector, a reflection of its stronger growth trajectory and improving profitability profile.

MongoDB currently has a Zacks Rank #2 (Buy) and a Growth Score of A, a favourable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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