AI Pivot Can Turn This Sale into a Buying Opportunity

The fear behind that collapse, and that of many of Monday's software peers, has been well covered. Investors worry that AI coding tools now make it easier for any company to build its own workflow platform in-house, rather than paying for software subscriptions. But as we've seen with other software names in recent months, those fears rarely correlate with reality as neatly as the charts might suggest.

The market seems to be starting this time, too, as the stock on Monday quietly made a base since February and has gained 30% since April.

In fact, there's a real argument that Monday's push into agent AI could turn this into one of the most attractive entry points into software right now.

Why Core Business Doesn't Actually Break

Let's start with the numbers, because that's where the most obvious difference between how the business was doing and what the stock was doing. In its latest report, Monday's revenue grew 24% year over year, while operating profit hit a record.

Full-year guidance for revenue and margins was also raised, while customer data was even more telling, with overall retention hitting record highs, and the company's business operations gaining new momentum. If AI coding tools were eliminating the need for Monday's field as the bears fear, these metrics should all be down.

Agent AI Pivot Goes Well

What makes the bull case so compelling right now is how true Monday's ongoing AI revolution is. In May, the company rebranded itself as an “AI platform,” which CEO Eran Zinman described as “the biggest change in our company's history,” adding that they were “going all in on a new vision.”

Monday's latest price pattern supports that. New customers move to a seat structure and credits that link what they pay directly to the AI-driven value they receive, meaning revenue can grow as AI agents do more work without requiring additional seat purchases.

Existing customers can also log in, and business customers get complimentary AI packages to drive acquisitions. That's a direct response to a persistent fear of SaaS figures across the industry: that AI will make per-seat pricing models obsolete.

Interestingly for investors, Monday's shift to working with AI, rather than fighting it, is starting to show results. In its most recent quarter, management revealed that AI pricing models contributed nearly 10% of net new annual recurring revenue, a figure that is expected to grow significantly in the coming months and years. The fact that the stock is still trading at the same price when all this was reported in May only adds to the sense that we are looking at a golden opportunity to enter.

Other Reasons for Bullying

The company's ongoing share repurchase program is another reason for the sustainability, as more than $550 million has now been invested in share repurchases. That kind of scale indicates that management believes the stock is mispriced relative to how the business is performing.

Recent analyst ratings such as BTIG Research's reiteration of Buy last week, and its price of $105, only add to the bullish case, while Monday's current price is the cherry on top. Compared to last summer's sky-high price-to-earnings (P/E) ratio of 413, Monday's current PE ratio of 33 looks like a bargain.

Putting It All Together

The next big thing to watch is Monday.com's next earnings report in August. The updated numbers, and any related guidance from management, will be a key test of whether Monday's AI monetization story is picking up or stalling.

For now, the market seems to be betting on the latter, which, in a stock that has already fallen 75% in 12 months, is dangerous territory.

Monday has a lot of good things going for it, and many of its key metrics are trending in the right direction. Add in the fact that it's trading at a fraction of what it was a year ago, while its AI transformation is going from strength to strength, and you can't help but feel that this is a contrarian's dream setup.

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