Guggenheim Sees 20% Long-Term Growth for monday.com (MNDY) as AI Adoption Accelerates

monday.com Ltd. (NASDAQ:MNDY) is one of the AI Stocks on the Market’s Radar. On December 4, Guggenheim initiated coverage of the stock with a “Buy” rating and a $250 price target. The firm is bullish on the stock as it sees material upside to new ARR and multi-year growth potential.

The work management software leader, boasting over 250K customers and 2.5M paying users, has transitioned from a “viral, self-serve strategy to a more sales-led, multi-product and upmarket approach.”

The company’s newer products, CRM, Dev, and Service now represent an estimated 10% of Annual Recurring Revenue (ARR) and have grown more than 80% year-over-year in the third quarter of 2025. This is compared to the 22% growth in its core Work Management offering.

The firm particularly highlighted Monday.com’s AI features, including vibe coding, which has led to the creation of more than 60,000 applications to date.

While the firm sees 20% long-term growth potential for the stock, Guggenheim believes that the stock reflects a zero-growth, worst-case AI scenario, which the firm believes is unjustified.

“Despite being on a track to deliver 26%+ revenue growth and 27%+ FCF margin this year, making for a rare, balanced Rule of 50+ company, by our math, MNDY shares are pricing in zero growth and declining FCF into perpetuity in the terminal year. In our view, valuation already reflects a worst-case scenario of AI-driven productivity inducing seat count decline. This is far from reality. By our analysis, seat growth has stabilized at >15% in 1Q25–3Q25 vs. 22% in FY24, driven by strong momentum in large customer (>$50K ARR) seat growth, while FY26/FY27 consensus estimates are achievable with modest seat growth deceleration, lesser pricing/cross-sell, and no AI contribution. This translates to modest New ARR growth, to which we see material upside, while customer/partner checks indicate high expansion propensity, supporting 20%+ growth for many years.”

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

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