MongoDB stock and shares of fellow data software firm Elastic jumped in Thursday trading, following a strong earnings report from enterprise software peer Snowflake.
MongoDB stock gained 12% to close at 315.53 on the stock market today. Meanwhile, Elastic added 6% to close at 94.02. Snowflake stock surged more than 32%
The gains come after a tough summer for MongoDB and Elastic. MongoDB entered trading Thursday down 31% year to date. Elastic was down 18% from the start of the year.
"While the obvious bank shot from SNOW will be other consumption names (such as Datadog and MongoDB), we believe some of the move in software is simply investors having to gross back up after overly punishing software this summer," wrote Evercore ISI analyst Kirk Materne in a client note Thursday.
Nvidia 'Multiplier Effect'
Consumption refers to companies that charge based on consumption of their products. Other stocks that haven't had the same struggles are still pushing higher on Thursday.
Database software giant Oracle added just under 1% to close at 192.45, adding to a more than 80% surge for the tech company this year. Confluent, a data streaming company, jumped 7% to close at 30.61. Confluent has slightly outpaced the S&P 500 with a 28% gain this year.
The iShares Expanded Tech-Software ETF (IGV), which holds shares of more than 100 enterprise software players, added 1% in Thursday trading.
The stocks are likely being helped by strong quarterly results and positive market commentary from AI kingpin Nvidia.
Wedbush analyst Daniel Ives wrote Thursday that Nvidia's results show the tech industry is "just starting the next stage of the AI Revolution being led by Nvidia with Blackwell driving massive growth in 2025 and beyond."
That could be good news for software, as Ives sees spending on Nvidia's Blackwell AI chips having a "multiplier effect" for the broader technology sector.
Both MongoDB and Elastic were popular picks on Wall Street coming into 2024 to benefit from the next wave of enterprise AI spending.
MongoDB, which offers database software for enterprises, saw its share price double in 2023. Elastic, which offers the leading search software for enterprises, saw similar gains.
But this year has been tricky. MongoDB stock sank 24% in late May after giving a disappointing sales forecast and is yet to recover. Elastic stock tumbled 28% following its most recent earnings report in late August, which included a weaker-than-expected sales forecast.
MongoDB entered Thursday trading more than 40% off a 52-week high from February, while Elastic is 25% lower than a 52-week high also reached in February.
MongoDB Stock: Earnings Test Ahead
The gains today for Elastic stock will be quickly put to the test. The company reports fiscal second quarter earnings results after regular trading closes today.
Analysts are looking for adjusted earnings to grow 3% year over year to 38 cents per share, while sales are expected to rise 14% to $354 million, according to FactSet.
MongoDB, meanwhile, will report earnings on Dec. 9. Analysts are projecting MongoDB's adjusted earnings will decline 30% to 67 cents per share while sales increase 15% to $497.6 million.
MongoDB broke out last week above a 297.68 cup-with-handle buy point, according to MarketSurge pattern recognition. Shares retreated back below that level in recent days but surged back Thursday, with MDB stock overtaking its long-term 200-day moving average.
