Monday.com Shares Tumble as AI Shifts Software Industry Ground

Shares of project management platform Monday.com fell sharply this week, dropping 21% in a single trading session. The decline followed the company's release of a revenue forecast that fell short of Wall Street's expectations, a sign of broader turbulence in the software sector as artificial intelligence reshapes the market.

The Israel-based company projected current-quarter revenue between $338 million and $340 million, below the $343 million analysts anticipated. Its full-year outlook also trailed estimates. This guidance arrives amid a sustained sell-off in software stocks, with the iShares Expanded Tech-Software Sector ETF down 22% this year alone. Monday.com's stock has lost roughly half its value in 2026 and sits far below its peak valuation from late 2021.

In response to analyst questions, co-CEO Eran Zinman stated the company sees no direct competitive impact from AI-focused firms yet. He emphasized a strategic shift, noting Monday.com is retooling its product and marketing to be 'more AI native,' highlighting new agent tools and features designed to boost user engagement.

Despite a strong fourth quarter, where earnings and revenue exceeded forecasts with 25% annual growth, the company anticipates a challenging year. Management cited foreign exchange pressures and general market volatility as factors likely to affect margins. The projected operating income for the year is significantly lower than analyst predictions, underscoring the cautious outlook that spooked investors.

Source: CNBC