Two Hidden Gems Poised for 2025 Bounce Back 

2024 was not kind to MongoDB (MDB), down 43%, given its growth deceleration, nor to GitLab (GTLB), down 11% after a bumpy second quarter. However, as GenAI moves from companies buying all the nVidia chips they can get their hands on to building and monetizing GenAI platforms and applications. As MongoDB joked on their last quarter’s conference call- “More senior leadership at companies brag about the chips they are using than the apps they are building.” 

MongoDB and Gitlab represent the tools platform and application companies need to build GenAI applications and platforms efficiently. Both companies are members of the prized Rule of 40 Club (Revenue growth plus margins >= 40), consistently post Net Revenue Rates over 120% yet have seen their valuations contract materially from the low to mid-teens to around 9x EV to 2025 revenue. According to Daloopa data, interest in these companies has increased into the year-end. We will delve briefly into each company below. 

MongoDB- the Database for GenAI Applications

MongoDB (MDB) suffered a rough 2024 as growth in its largest product, Atlas (Database as a Service), which represents around 70% of total revenue, decelerated every quarter for the last six quarters, as seen in the highlighted portion of the datasheet below.

MDB is pursuing more up-market enterprise customers while pushing to help companies take advantage of their valuable proprietary data trapped in old databases to move that over to utilize it for GenAI with their modern database with embedded text and vector search capabilities. 

While overall growth has decelerated for MDB, their Remaining Performance Obligations has shown a strong uptick the last two quarters, accelerating to the 40% year over year mark from mid to high 20%s before.

Gitlab Helping Developers Use AI to Code More Efficiently

Gitlab’s AI Duo product allows developers to utilize AI workflows throughout the software development cycle. Duo has gone from a product occasionally added into deals for trial to a significant tool that is being purchased by more companies in larger scale. In fact, the last quarter when Duo was involved it represented over 25% of the new ARR for the deal. 

Recently, Gitlab has increased its hiring plans for its go-to-market team, an indication of confidence in its business. Given they raised prices on their Premium tier from $19 to $29 two years ago but allowed customers to renew early at the lower price, the price increase will have a more profound effect on revenue in 2025 than in 2024. 

Gitlab and MongoDB are two stocks that should be explored as critical tool providers for the GenAI revolution. It looks like 2025 is set up to be much better for both companies as the baton is handed from NVDA to the next layer of GenAI enablers.