Monday.com Withdraws 2027 Guidance Amid AI Uncertainty, Stock Plunges 25% Despite Earnings Beat

What happened

Monday.com's stock fell 25% this week after the company reported revenue and earnings that exceeded analyst expectations for the latest quarter. Management withdrew its 2027 financial guidance, citing heightened uncertainty around AI adoption and currency headwinds as primary reasons. This pattern aligns with the DeepValue report's observation that conservative guidance has repeatedly triggered sharp selloffs, reflecting investor sensitivity to any growth deceleration signals. The report notes that while enterprise customer growth and net dollar retention remain robust, SMB softness from search changes and AI competition pose significant risks. The guidance withdrawal amplifies concerns about monday.com's ability to sustain its high growth trajectory in a volatile macro and technological landscape.

Implication

The loss of forward guidance removes a key anchor for valuation, forcing investors to rely more on quarterly execution and increasing the stock's sensitivity to any operational missteps. AI uncertainty could delay the monetization of monday.com's digital workforce strategy, undermining the bull case for revenue acceleration from new products and features. Currency headwinds may compress margins, threatening the path to higher non-GAAP operating profitability that is central to the investment thesis. However, the company's strong net cash position and durable enterprise demand metrics, such as high net dollar retention in large cohorts, provide a cushion against severe downside. Critical monitoring points now include upcoming NDR trends, large-customer growth rates, and early AI adoption metrics to assess whether core strengths can offset these new headwinds.

Thesis delta

The withdrawal of 2027 guidance introduces a material shift towards higher uncertainty, challenging the assumption that monday.com can smoothly navigate AI disruption and macro pressures to sustain over 20% revenue growth. It forces a reassessment of growth sustainability and margin expansion timelines, potentially lowering the probability of the base case scenario where enterprise momentum offsets SMB softness. Investors should adjust models to incorporate more conservative growth estimates and heightened risk premiums until clarity emerges on AI monetization and currency impacts.