AI stock Monday.com is today's pick for IBD 50 Growth Stocks To Watch as it recovers from a drop and sets up to break out. Monday stock inched lower even after JPMorgan Chase raised its price target to 270 from 230 and maintained its overweight rating.
Monday.com operates a cloud-based project and work management platform used in planning and managing projects and tracking activities and tasks. Its collaborative workflow platform is used to create reports, track project progress and budgets and gauge workloads.
It uses artificial intelligence from Microsoft's Azure OpenAI as its large language model provider. The AI technology is used in content creation, email and text suggestions and used to create complex formulas.
AI Stock Climbs Back After Plunge
Monday.com stock reached a 52-week high of 239.22 on Feb. 9 in heavy trading before tumbling the next trading session. The AI stock sank 10.1% in huge volume after the company's better-than-expected fourth-quarter earnings and sales report on Feb. 12. The disappointment came from management's current quarter and full-year 2024 revenue outlook that was in line, but didn't wow analysts.
The plunge started a stage-two flat base on the weekly chart, with a 239.22 buy point according to MarketSurge pattern recognition.
Monday stock has climbed back while testing its 10-week moving average as it forms the new six-week base. The AI stock bounced off its 10-week line last week and is trading above its 21-day exponential moving average. Its relative strength line has been on a jagged sideways trend on its daily chart.
Shares have gained around 21% in 2024 thus far, but have a long way to go to get back to Monday's all-time high of 450 from Nov. 9, 2021. The stock had its initial public offering on June 10, 2021, starting at 155 per share.
Monday Profits Expected To Stall
Monday.com's fourth-quarter profit jumped 48% on 35% sales growth. Analysts expect 2024 earnings of $1.82 per share in 2024, slightly down from $1.85 in 2023. Then they see that exploding to $2.57 in 2025.
The AI stock holds an impressive 96 out of 99 IBD Composite Rating. Its less-than-ideal 82 EPS Rating includes losses going back several years.
Monday stock holds an Accumulation/Distribution Rating of A-, showing fairly heavy buying over the last 13 weeks. It also earned a 1.4 Up/Down Volume Ratio, supporting the positive demand for the AI stock.
Mutual funds have added shares, with 573 funds owning the AI stock in December, rising from 432 in September and 448 in June.
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