Monday.com slides as BofA downgrades amid increasing risks

Monday.com (NASDAQ:MNDY) was in focus on Thursday as Bank of America downgraded the project-management software company, citing increasing risks.

Shares fell nearly 2% in premarket trading.

“After an in-depth review of Monday.com’s web traffic by marketing channel, we are downgrading shares to Neutral from Buy,” Bank of America analyst Matt Bullock wrote in a note to clients. “According to Similarweb, search engine optimization (SEO) driven website visits to Monday.com sank by an avg of 23.5% Y/Y in 2Q25 – and Y/Y declines accelerated to -25.3% in July. Mounting headwinds are likely driven by Google’s expanding integration of AI Overviews into search results. Given that [less than] 30% of total signups come through Google, we introduce a proprietary framework leveraging Similarweb data to quantify potential impact to growth. Our conclusion is that, despite recent pressure on shares (-30% since 2Q25 earnings), fundamental challenges and a potentially gnawing AI search disruption bear narrative make risk/reward balanced from here.”

Despite the downgrade, Bullock kept his price target of $205 steady.

Delving deeper, Bullock said that if the weak July 2025 traffic trends were to continue, monday.com could face “material self-serve” pressures in the second-half of 2025 and 2026.

“We estimate that self-serve gross added ARR grew roughly 29% Y/Y in 2024, but has since flipped negative to -7% Y/Y in 2Q25,” Bullock explained. “Carrying July 2025 traffic growth forward, our math implies that 2026 self-serve gross ARR added could decline by 5.2% Y/Y (equating to a roughly 2 [point] hit to total 2026 gross ARR added).”