Jefferies’ Top Crowded Software Short Positions: Top 9 Stocks

1. MongoDB, Inc. (NASDAQ:MDB)

Number of Hedge Fund Holders In Q2 2024: 54

Shares Short % Of Outstanding: 4.58%

MongoDB, Inc. (NASDAQ:MDB) is a database as a service (DaaS) company that provides businesses with software to store and manage their data. Its shares have struggled this year and are down 31% year to date. This is because MongoDB, Inc. (NASDAQ:MDB) has struggled to maintain investor optimism surrounding growth. The kick-off started in May when the firm’s first-quarter results guided Q2 revenue and EPS at $462 million and $0.47. These missed analysts estimates of $470 million and $0.58, respectively. Investors were also left worried by the fact that MongoDB, Inc.’s (NASDAQ:MDB) full-year guidance only promised a 12% growth for a visible slowdown over last year’s 57%. However, this doesn’t mean that the firm is down and dusted when it comes to growth as its Atlas database platform is one of the fastest-growing products in the market courtesy of its 30%+ growth rate. Therein lies MongoDB, Inc. (NASDAQ:MDB)’s biggest weakness too as any headwinds faced by Atlas could translate into hefty stock underperformance.

MongoDB, Inc.’s (NASDAQ:MDB) management commented on its growth during the Q2 2024 earnings call:

“Starting with consumption of existing applications on our platform, this is where we have historically seen a macro impact as usage of applications is impacted by the underlying business conditions of our customers. As we discussed on our last earnings call, in Q1, we did see broad-based consumption growth slowdown, suggesting some macro softening. Our usage trends suggest a similar macro-environment in Q2 as in Q1, even though Q2 Atlas consumption growth was modestly ahead of our expectations. Moving on to new business, we generally have not seen the macro-environment impact our ability to win new business, and that was true in Q2 as well.”

MDB is a software stock institutional investors are shorting according to Jefferies. While we acknowledge the potential of MDB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MDB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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