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MongoDB Raises Annual Forecasts Amid Increased Service Usage

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MongoDB (MDB.O) announced on Monday that it is raising its annual revenue and profit forecasts for the second time this year, driven by strong growth in the usage of Atlas, its cloud-based database management service. The news prompted a 10.6% rise in the company’s shares in after-hours trading.

Unlike traditional subscription models, MongoDB operates a pay-as-you-use pricing model, where customers are charged based on their service usage. This model has proven successful, particularly as demand for services involving artificial intelligence (AI) deployments has surged.

Strong Growth Across the Board

MongoDB’s updated financial outlook reflects robust demand for its offerings, especially the Atlas service. The company now expects adjusted profit per share for the fiscal year ending on January 31 to range between $3.01 and $3.03, up from its prior forecast of $2.33 to $2.47.

Additionally, MongoDB revised its revenue forecast for the fiscal year, now projecting between $1.97 billion and $1.98 billion, an increase from the previous projection of $1.92 billion to $1.93 billion. The company’s third-quarter revenue rose by 22% year-over-year to $529.4 million, exceeding the analyst consensus of $502 million, according to data from LSEG.

On an adjusted basis, MongoDB earned $1.16 per share in Q3, significantly outperforming the expected profit of $0.69 per share.

Leadership Transition

In another development, MongoDB announced that its Chief Financial Officer (CFO), Michael Gordon, will step down at the end of the fiscal year. Serge Tanjga, the company’s Senior Vice President of Finance, will take over as interim CFO starting February 1, while MongoDB searches for a permanent successor.

Industry Trends

MongoDB’s performance comes at a time when other companies in the cloud database sector, such as Snowflake, are also revising their forecasts upward due to increased service usage. Snowflake recently raised its full-year product revenue forecast, bolstered by strong consumption and bookings, alongside its AI-focused partnership with Amazon-backed Anthropic.

DraftKings CEO Highlights Key Inflection Point in Sports Betting Industry

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DraftKings CEO Jason Robins discussed the future of the online sports betting market in an interview with CNBC’s Jim Cramer, highlighting an “important inflection point” as sports betting gains legal ground nationwide. Robins noted that an increasing number of people across the U.S. now realize they can legally place bets on sports, fueling significant industry growth.

“We’re at a very important inflection point in the industry,” Robins explained. “Most people assume it’s legal in most states now, if not all, and we’re seeing a lot of great growth.”

Despite this growth, DraftKings adjusted its full-year revenue forecast for 2024 after reporting earnings on Thursday. The company attributed the lowered guidance to favorable early fourth-quarter outcomes for customers, which impacted revenues as bettors on the platform saw high returns. This announcement sent DraftKings’ stock down by nearly 6% in after-hours trading.

Robins emphasized that DraftKings remains in an “acquisition-heavy phase” as it continues to expand its customer base in the relatively young sports betting sector. Since the Supreme Court’s 2018 decision to lift the federal ban on sports betting, the industry has flourished. In September, the American Gambling Association predicted that $35 billion would be wagered legally during the current NFL season, a 30% increase over last year and a new record.

Currently, sports betting is legally permitted in 38 states and Washington, D.C. Robins remains hopeful about further state-level legalization but acknowledged the legislative challenges involved. “I think really California, Florida, and Texas are big ones,” he said. “I would expect most states over the long term will have some form of legal sports betting, and hopefully we’ll get those three.”

 

Intel’s AI Chip Sales Fail to Meet Projections Despite Optimistic Forecasts

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Intel’s (INTC.O) revenue forecast exceeded market expectations on Thursday, but the results highlighted a weak spot for the tech giant: sales of its AI-focused Gaudi chips have significantly missed targets. Initially projecting sales of over $500 million for Gaudi AI accelerator chips in 2024, Intel has now abandoned that forecast. CEO Pat Gelsinger attributed the slow sales to issues with software compatibility and the ongoing transition from Gaudi’s second to third generation.

Despite Intel’s promising overall revenue, which boosted its stock by 5% in early trading on Friday, the company’s shares are still down by over 50% for the year. Intel continues to face challenges in capitalizing on the AI market, where its main competitor, Nvidia (NVDA.O), has consistently led. After the 2022 launch of the AI tool ChatGPT, powered by Nvidia’s GPUs, Intel hoped its AI offerings could capture more market share. Gelsinger had pushed for higher projections, advocating for a $1 billion revenue goal in 2023, as Nvidia’s sales soared in comparison.

Intel faced obstacles early on in its AI strategy. In July, Gelsinger announced a “pipeline of opportunities” worth over $1 billion for Gaudi, though Reuters sources indicate Intel did not secure adequate chip supplies from contract manufacturer TSMC (2330.TW) to fulfill this target. Intel defended its high projections, stating that not all pipeline opportunities translate into revenue but emphasizing its drive for ambitious internal goals.

In 2023, Intel assured investors it had the potential to secure over $2 billion in AI-chip deals, with an expectation of generating over $500 million in AI revenue for 2024. On Thursday, however, Gelsinger confirmed that this forecast had been withdrawn, shifting focus to longer-term opportunities in AI.

Analysts expressed skepticism regarding Intel’s future in AI. Vivek Arya of Bank of America asked Intel about its AI strategy in light of potentially losing CPU market share and lacking a competitive AI product. Gelsinger replied that CPUs were increasingly significant in AI data centers and that customer interest in Gaudi remained promising, especially with the improved benchmarks of the chip’s third generation.

In the broader picture, Intel reported $13.3 billion in third-quarter revenue, surpassing analysts’ expectations, although it posted a loss of $16.6 billion due to impairment and restructuring charges. According to Michael Ashley Schulman, Chief Investment Officer of Running Point Capital, Intel’s focus on cost-cutting and growth has potential, though he noted concerns over Gelsinger’s management approach, suggesting Intel’s leadership might be overestimating its progress and market position.