According to analysis from financial news publication The Tokenist, just ten companies accounted for 35% of the S&P 500’s market cap in March – largely fueled by AI. This faster-than-expected adoption of generative AI technology has played into MongoDB’s hands, with shares gaining as much as 40% in June on several important catalysts.

MongoDB shares erupted as much as 30% in the first week of June after the database software company reported much better-than-expected results and offered a very strong outlook for the second quarter. The company expects full-year EPS of $1.49 on revenue of $1.53 billion, an upward revision to the prior forecast for earnings of $1.04 on revenue of $1.495 billion.

For this quarter, MongoDB’s forecast crushed analyst views, which were looking for a profit per share of 15 cents on revenue of $361 million. This is compared to the company’s outlook for EPS of $0.43-0.46 on revenue of $390 million.

The strong Q2 forecast, coupled with the massive Q1 outperformance, pushed shares sharply higher. The outlook signals a faster-than-expected recovery in the consumption trends and it could be that MongoDB is seeing strong tailwinds from its generative AI exposure.

For the first fiscal quarter, the company reported a profit per share of $0.56, crushing the $0.18 expected by analysts. Revenue rose 29% year-over-year to $368.3 million, again easily ahead of the analyst views. Subscription revenue was $354.7 million, with the company’s core business segment – Atlas (NYSE:ATCO) – seeing its revenue growth hit 40%.

MongoDB stock then continued to rally in the final days of the last month after the company held an investor event, where it unveiled a series of new products. Analysts who attended the event came away increasingly more positive about the company’s long-term growth prospects.

The company’s management presented at least 5 major products, including Atlas Vector Search, Atlas Stream Processing, the general availability of Relational Migrator, Queryable Encryption, as well as MongoDB Time Series Advancements.

For instance, the Atlas Stream Processing product allows the processing of high-velocity streams of complex data. The product offers three 3 key capabilities: Continuous processing, validation, and merge.

In addition to these announcements, MongoDB’s financial team also presented a series of new business metrics around the impact of new workloads on short-term and long-term growth.

During the investor event, the management’s tone surrounding GenAI was extremely positive. MongoDB sees itself as a major beneficiary of this revolution as, among other things,

AI will increase the volume and sophistication of applications. Moreover, MongoDB’s products, especially its document data model, are practically built for AI-fueled applications.

In this context, the biggest focus is on Vector Search, which is now integrated into Atlas. This product now allows MongoDB to address GenAI applications. According to the company, Vector Search is “designed to meet the demands of data in all forms and allow our partners to harness these incredible new capabilities.”

The product allows MongoDB Atlas users to query data based on semantics or the meaning of the data rather than the data itself. The GenAI has enhanced the quality of these vectors, which are now better positioned to “capture the meaning of data by projecting lower dimensional data into a higher dimensional space that contains more context about the data.”

Investors seem to be incrementally positive about the company’s opportunity to become a go-to developer data platform fueled by the GenAI platform shift. In addition to Vector Search, MongoDB Atlas also allows its users to seamlessly integrate major GenAI applications, such as the hyperscalers and open-source LLMs (large language models).

A number of Wall Street analysts boosted their price target forecasts on MongoDB, further fueling a rally in MDB shares. For instance, Stifel analysts hiked their stock target to $420 per share and offered the following commentary after attending the event.

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Shane Neagle is the EIC of The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and artificial intelligence.