Mizuho's Upgrade of MongoDB#
Mizuho has upgraded MongoDB's rating from Neutral to Outperform, citing several positive trends. The brokerage points to improving growth patterns, an increase in customer additions, and sustained demand linked to artificial intelligence (AI) workloads as key factors for this change.
Customer Growth and Revenue Trends#
In fiscal 2026, MongoDB achieved a record of 10,700 net new customers, marking a 60% increase from the previous year. Additionally, the company's net revenue retention rate rose to 121%, up from 118%. Revenue grew by 23%, while the workforce only increased by 1%, indicating effective cost management and enhanced efficiency.
Future Growth Drivers#
Mizuho anticipates several growth drivers that will support MongoDB's future gains. Under the leadership of new CEO CJ Desai, the company has revised its sales strategy to strengthen enterprise relationships while focusing more on developers. This shift is already showing improvements in sales performance. The brokerage also expects MongoDB to expand beyond its core document database, which could further increase its usage.
AI's Role in Demand#
The brokerage believes that AI will not disrupt MongoDB's business but will instead drive sustained demand. AI applications require significant data storage and processing, leading to increased database workloads. Currently, around 30% of MongoDB's Atlas revenue is related to AI use cases, which Mizuho views as a promising sign for long-term demand.
Broader Data Platform Strategy#
MongoDB is also shifting towards a more comprehensive data platform that includes search and vector capabilities, which is expected to enhance customer engagement. Notably, about 70% of Atlas's annual recurring revenue comes from customers utilizing multiple products, resulting in higher spending compared to those using a single product. Mizuho values MongoDB at approximately eight times its expected revenue for 2027, aligning with industry peers, and sees potential for further growth as these drivers strengthen.