Monday.com shares have remained under pressure this year, falling sharply as investors weigh whether the company’s no-code, workflow automation platform can fend off AI-driven change in the software market. After a February drop tied to guidance concerns, the stock later rebounded following results that beat early expectations and an increase in full-year outlook, but it is still down substantially versus recent highs.
Key takeaways
- Price move: Monday.com shares are down more than 40% in 2026 and more than 70% over the past year.
- Catalyst: The biggest early sell-off followed a February outlook that pointed to first-quarter revenue coming in below analyst expectations.
- What changed: In May, the company reported Q1 revenue that exceeded the original analyst estimates by a wide margin and raised its full-year guidance.
- Market implication: Despite improving fundamentals, investor focus remains on whether AI tools could reduce demand for the company’s user-friendly workflow software.
What drove the move
Monday.com’s sharp decline has been closely linked to concerns across the software-as-a-service space that AI could alter how customers build and manage workflow automation. The company sells a visual interface designed to help organizations automate tasks without requiring technical setup, and it has been expanding its AI capabilities with tools including AI agents and Monday Vibe.
Even so, investor anxiety has centered on the risk that AI features—whether embedded in broader software suites or built internally—could substitute for Monday.com’s drag-and-drop experience. That concern helped fuel the February sell-off, when the company projected that Q1 2026 revenue would fall just short of analyst expectations.
Earnings results and guidance update
Those fears eased somewhat after Monday.com delivered a stronger-than-expected quarter. The company reported Q1 results in May showing revenue of $351.3 million, representing 24% growth. According to the report, growth was driven by existing customers, with net dollar retention at 110% overall.
The company also highlighted retention strength among larger cohorts, with net dollar retention at 114% for customers with more than 10 users and 116% for customers with annual recurring revenue of $50,000 or more. Retention above 100% indicates growth from customers that have remained with the platform for at least a year after churn.
On revenue versus expectations, the company’s Q1 results beat the original analyst revenue estimates by $342.9 million and included an increase to full-year guidance. While the details of the guidance change were not accompanied by broader consensus figures in the article, the report said the updated outlook supported a rebound from the stock’s lows.
Forward view: Q2 and full-year outlook
Looking ahead, Monday.com forecast Q2 revenue of $338 million to $340 million, implying 18% to 19% growth. For the full year, the company projected revenue between $1.466 billion and $1.474 billion, which the report said is above prior guidance of $1.452 billion and $1.462 billion.
Despite the raised forecast and reported retention strength, the stock has not fully regained investor confidence, reflecting the market’s ongoing debate over whether AI will expand Monday.com’s product category—or compress the value of specialized workflow software.
Market reaction and what investors are watching
Monday.com continues to show revenue expansion and an improving narrative around customer engagement, but the sell-off underscores how quickly SaaS investors can reprice stocks when AI threatens a company’s perceived differentiation. The company’s offering is positioned as simpler than alternatives, and it has introduced AI features that could preserve that ease of use; however, investors remain focused on competitive substitution, including the possibility that customers adopt AI-enabled alternatives that reduce the need for dedicated workflow platforms.
Another factor in the market reaction is valuation. The article states the shares trade at a price-to-sales ratio below 3 times and a forward price-to-earnings ratio below 19 times, for a company still projected to grow revenue by nearly 20%. For investors, those valuation measures frame the key question: will AI-driven product change widen the addressable market, or will it pressure pricing and usage growth?
Next for Monday.com, investors will likely track quarterly revenue growth, customer retention trends—especially among larger accounts—and the pace of adoption of its AI initiatives, including Monday Vibe. The market will also be watching upcoming company updates as well as broader macro drivers that can influence growth-stock multiples, including interest-rate expectations and technology-sector sentiment.
