Monday's stock slides as earnings signal more pain for the 'poster child' of AI-disruption fears

By Emily Bary

While the maker of project-management software sees ways to benefit from AI, it cautioned about a 'choppy' sales environment

Monday.com executives touted the company's own AI tools, but shares have been punished in recent weeks on concerns over AI disruption.

Monday.com was already viewed by Wall Street as a software business particularly vulnerable to artificial-intelligence disruption, and the company's latest guidance just provided more ammunition to the bears.

While management at the maker of project-management software took the view that the company (MNDY) could actually be a beneficiary of AI, investors are spooked by the company's disclosure of a tough sales environment, which may have a different sort of AI link.

"No-touch channels continue to operate in a choppy demand environment, particularly among the smaller customers, which we expect to persist in 2026," co-CEO Roy Mann said on the earnings call.

See also: Software stocks have been crushed. Here's how to play the sector as the dust settles.

"What this means, in practical terms, is that the costs to acquire and expand self-serve customers have increased over the past year, and the returns on those investments have been below historical levels," he added. Monday is seeing healthier trends in "touch" sales, which involve interaction with human representatives.

Monday's stock fell about 21% on Monday. It's down 47% so far this year.

The company's forecasts were lower than expected. Monday projected $338 million to $340 million in revenue for the current quarter and $1.452 billion to $1.462 billion in revenue for the full year, whereas analysts were looking for $343 million and $1.478 billion, respectively.

On the call, executives positioned Monday as an AI player, rather than one at risk of being displaced. The company "is evolving into an AI-powered work execution platform, built around three distinct layers of AI value," co-CEO Eran Zinman said. One is Monday's own vibe-coding tool for quickly creating workplace applications.

Mizuho trading-desk analyst Jordan Klein wrote that Monday "has been a poster child for the AI-killing-software narrative."

He noted that the pressures on Monday's self-service sales relate to AI in a way.

"Any software (or Internet) based sales lead model that is heavily driven by SEO search volumes has been under a lot of pressure with investors freaked out that new AI agents and Google 'AI Overviews' ... are completely changing ways consumers and business users gain information online," Klein wrote.

Don't miss: Software ate the world. Now, Wall Street is worried AI will eat software.

-Emily Bary

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02-09-26 1648ET