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IBD 50 company MongoDB (MDB) will be a “leading beneficiary of explosive data growth,” according to a new report from Bank of America analysts. MDB stock got a boost in premarket trading after BofA Securities initiated coverage of the company with a buy rating Thursday.

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“MongoDB is a best-of-breed next generation database vendor that is well-positioned in the rapidly growing NoSQL unstructured database market,” Bank of America analyst Brad Sills wrote in a client note Thursday.

Further, the company could capture market share from leaders such as Amazon (AMZN) and Microsoft (MSFT), the report said.

Bank of America set a price objective of 450 for MDB stock. On the stock market today, MDB stock climbed as much 2% before giving up some gains. Shares are up less than 0.05% at 366.26 in recent action.

MDB Stock: AI Boost

The New York-based MongoDB’s main platform, Atlas, is built on what is called NoSQL. The document-based data platform gives developers flexibility and the ability to store vast amounts of data, as described by MongoDB.

As more companies adopt generative artificial intelligence products, Sills said the volume and sophistication of data applications will increase.

“This should serve as a tailwind for MongoDB, given the platform’s flexible document model to handle complex data structures and evolving data models,” Sills wrote.

MDB stock is up nearly 90% this year.

For its quarter ending in July, MongoDB reported adjusted earnings of 93 cents a share, more than doubling Wall Street’s prediction for 46 cents, according to FactSet. Sales jumped 40% to $423.8 million, vs. expectations of $394 million.

Competitive Market

But MongoDB faces major competition in the $108 billion database market, the BofA Securities report added.

Citing figures from Gartner, Sills noted that database management offerings native to cloud providers Amazon and Microsoft dominate the market. Legacy player Oracle (ORCL) also holds significant market share.

“Market share of next-generation vendors is still relatively low, with MongoDB owning only 2% of the market as of 2022,” Sills wrote.

Bank of America expects MongoDB will have several advantages to capture a larger share.

The company has a huge developer community, a proprietary document storage model and supports 13 programming languages, the report said.

Further, Sills wrote that feedback from buyers suggests Atlas increasingly is “the database of choice to support growing AI applications.”

Last month, MongoDB announced a range of new generative AI tools designed to boost productivity for developers.

MDB Stock: Strong Technical Scores

MDB shares have a strong Relative Strength Rating of 97, according to IBD Stock Checkup. The score puts MDB stock in the top 3% of all stocks when it comes to 12-month performance. MongoDB stock also has a near-perfect IBD Digital Composite Rating of 98 on a 1-99 scale, measuring fundamental and technical performance.

MDB stock was recently added to the IBD 50 list of companies showing strong relative strength and fundamentals. Further, MongoDB stock is an IBD Tech Leader. MDB is in a consolidation pattern with a buy point of 439, according to MarketSmith.

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Article originally posted on mongodb google news. Visit mongodb google news