Shares of Monday.com (NASDAQ: MNDY) dropped 37.3% in 2025 and are down 70% from all-time highs, according to S&P Global Market Intelligence data. The software provider, which helps teams manage tasks, has seen its stock decline alongside other software companies due to concerns about artificial intelligence disruption.
Investor fears center on new AI tools like Claude Code, which allow people with minimal coding experience to build software from scratch through chatbot communication. The bearish argument suggests companies may start creating their own software with these AI tools, reducing demand for third-party platforms such as Monday.com.
However, Monday.com's recent financial results show continued growth. Last quarter, revenue increased 26% year-over-year. The number of customers spending over $50,000 annually on its software services grew by 37%.
The company has been profitable since 2023, generating positive free cash flow. It is expanding beyond employee task management into marketing solutions, developer support, and IT support to broaden its market reach.
Following the significant price decline, Monday.com now has a market capitalization of $6.9 billion. This represents a price-to-free cash flow ratio of approximately 20 based on trailing free cash flow of $343 million.
The Motley Fool Stock Advisor analyst team recently identified what they believe are the 10 best stocks for investors to buy now, and Monday.com was not included. The team noted that Stock Advisor's total average return is 955%, compared to 196% for the S&P 500.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monday.com.