We recently published a list of 15 Hot Tech Stocks to Buy Right Now. In this article, we are going to take a look at where MongoDB, Inc. (NASDAQ: MDB) stands against other hot tech stocks to buy right now.
In 2024, the S&P 500 IT Sector Index outperformed the broader S&P 500 Index, rising approximately 36% compared to a 23% increase in the latter. This performance was underpinned by emerging trends and innovations, particularly generative AI (GenAI) and the huge investments that went into creating the infrastructure to support the growth of such technologies.
According to Gartner, the year 2025 might see a further uptick in investments. In its January 21, 2025 report, Gartner forecasts Worldwide IT spending to grow 9.8% year-over-year in 2025 to total $5.61 trillion. Among the segments, data center systems, devices, and software are projected to see double-digit growth in 2025 primarily due to GenAI hardware upgrades.
While increasing investment is a positive sign, John-David Lovelock, distinguished VP Analyst at Gartner, shared the complex intricacies of these investments in the report:
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending. This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.
IT services companies and hyperscalers account for over 70% of spending in 2025. By 2028, hyperscalers will operate $1 trillion dollars’ worth of AI optimized servers, but not within their traditional business model or IaaS Market. Hyperscalers are pivoting to be part of the oligopoly AI model market.”
As indicated by these forecasts, technology continues to remain an exciting space in 2025.
Our Methodology
To shortlist the 15 hot tech stocks to buy, we screened companies with a market capitalization of at least $2 billion, more than 20% share price gains in the last 6 months and a potential upside of at least 20%. The stocks were then arranged in ascending order of their potential upside to arrive at the final list. We also included the number of hedge fund holders for each company based on hedge fund data from Insider Monkey’s database.
Note: All pricing data is as of market close on February 4.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A software engineer hosting a remote video training session on a multi-cloud database-as-a-service solution.
MongoDB, Inc. (NASDAQ:MDB)
Upside Potential: 45%
Number of Hedge Funds: 49
MongoDB, Inc. (NASDAQ:MDB) is a developer data platform company that provides modern database platforms and related services for developers. The company’s flagship product, MongoDB Atlas, is a fully managed multi-cloud developer data platform that allows organizations to build and scale applications quickly and efficiently. According to the company’s last annual report, IDC estimates the data management software market, the company’s primary market, is projected to grow from $94 billion in 2023 to approximately $153 billion in 2027, with a CAGR of 13%.
The investment management company, Montaka Global Investments, stated the following regarding MongoDB, Inc. (NASDAQ:MDB) in their Q4 2024 investor letter:
“As a database provider for large production-ready applications, MDB has suffered of late because software developers have overwhelmingly focused on small, experimental AI-based ‘proof of concepts’ rather than production deployments. We expect this cycle to turn in 2025 and beyond, and its possible (though not certain) that demand for MDB accelerates materially.
There are strong arguments for why MongoDB (NASDAQ:MDB) should thrive in a world in which AI is infused into applications. These include – a) As one of the largest and well-established database offerings available for ‘unstructured data’, MDB should benefit from new AI applications on the basis that 80-90% of the world’s data is inherently unstructured. B) Relational databases (e.g. Oracle) that handle structured data that align to a fixed schema, lack the flexibility required to handle the rapid changes and evolutions that are taking place in AI. C) New AI coding agents can now automate the (previously too time consuming) transfers of data from a relational database to a more flexible MDB. Given MDB’s market share of the overall database market is only approximately 2% today, small changes in market share would likely translate into outsized percentage gains in MDB’s value.”
Overall, MDB ranks 5nd on our list of hot tech stocks to buy right now. While we acknowledge the potential of MDB to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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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Disclosure: None. This article was originally published at Insider Monkey.