MongoDB could gain from AI adoption, says BofA

Bank of America expects MongoDB Inc (NASDAQ:MDB)'s investor day on September 29 to provide a potential catalyst for the shares, with artificial intelligence (AI) adoption metrics and higher long-term targets among the key areas to watch.

The broker said quantitative evidence that AI is improving customer acquisition or consumption could strengthen the investment case, while updates on Model Context Protocol (MCP) adoption and stronger financial targets could support a higher valuation.

BofA maintained its 'Buy' rating and $540 price target, which implies about 40% upside, saying MongoDB trades at 8.6 times estimated 2027 enterprise value to revenue, a 43% discount to its established AI-beneficiary peer average of 15.2 times.

MongoDB has delivered sustained Atlas growth of 29% year on year over the past five quarters, while Enterprise Advanced (EA) is emerging as a second growth engine and profitability has continued to exceed expectations.

BofA said EA revenue could broaden MongoDB's customer footprint, with demand supported by data sovereignty, cloud capacity, governance and regulatory requirements.

EA annual recurring revenue grew about 11% in the second quarter of fiscal 2027, marking its third consecutive quarter of double-digit growth, while reported revenue increased 30.5% from a year earlier.

The broker said customers using both Atlas and EA generate above-average Atlas consumption growth, suggesting EA could support expansion while helping fund further investment.

BofA said AI consumption data would be the clearest potential upside catalyst, while growth in Voyage and Vector Search and adoption of MCP could provide additional evidence of AI-driven demand.

MongoDB added a record 2,900 customers in the second quarter, while Voyage customers roughly doubled sequentially and Vector Search adoption outpaced overall company growth, according to Bank of America.

The broker said higher three-to-five-year financial targets could further strengthen confidence in MongoDB's growth prospects, with current targets of high-teens revenue growth and operating margins above 20% appearing conservative against fiscal 2027 guidance.