We believe MongoDB (MDB:NASDAQ) could be one of the hottest ways to play another strong year of AI (artificial intelligence) growth in 2024, and many analysts agree. It’s a higher risk play but matched by exciting potential.

MongoDB is all about massive data; managing, analysing and drawing valuable insights from it. You might think we are already drowning in data but if AI is to deliver on its huge promise, we are going to need more of it? much more. Data is AI’s rocket fuel.

MongoDB operates a scalable and flexible document database that can handle both structured (spreadsheets, for example) and unstructured data sets (text documents, say). It is hugely popular with software developers because it is simple to learn and use, while still providing all the powerful capabilities needed to meet the most complex requirements at any scale.

It has also become a hit with corporate buying departments, allowing companies to seamlessly tailor the software to their own multi-cloud computing environments in multiple software coding languages.

It is a point not missed by Wells Fargo. Its analysts believe the key to long-term growth is MongoDB’s ability to win new workloads, as ‘every incremental workload has an exponential impact on annual recurring revenue’.

Running AI programmes requires huge amounts of data from which AI can analyse and learn. Take self-driving cars, for example. Not only do they require enormous computing power to assess a multitude of geolocation data points, but they also must constantly assess large numbers of mobile factors - other vehicles, people, animals, weather, and lots more that could affect the car and its passengers.

Since listing on Nasdaq in 2017, MongoDB has consistently smashed growth expectations, firing the stock to gains of more than 1,100%. In its last quarter (to 31 October, its fiscal third quarter), the near-$30 billion company smashed expectations of $406.3 billion revenue at $432.9 billion.

Crucially, earnings did the same, its $0.96 per share blasting past the $0.51 predicted by analysts. That will mean fiscal 2024 (to Jan) will go down as MongoDB’s breakthrough year for positive net earnings. Fiscal 2025 should be even better, with consensus pitched at $270 million of net profit on more than $2.02 billion revenue, implying 22% growth.

Yes, the stock has had a fantastic 2023, more than doubling, but that still leaves the share price far below record $570 levels of June 2021. With net cash of around $600 million to fund further growth, we expect 2024 to be another strong year for shareholder returns.

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