From Nasdaq: 2024-06-06 05:23:00

Just a week after the S&P 500 hit an all-time high, software stocks MongoDB, Snowflake, and Atlassian hit new 52-week lows on May 31. Software stocks have been absent from the growth stock rally, weighing down the tech sector dominated by surging semiconductor stocks like Nvidia.

MongoDB, known for its flexible NoSQL database platform, fell 23.9% in response to disappointing quarterly results. The company’s revenue increased by 22% compared to the same quarter last year, but slower growth rates have affected investor confidence.

Snowflake, a cloud data platform company, saw slower growth with first-quarter fiscal 2025 revenue growing at 33% compared to last year. The company’s expenses have risen due to heavy investments in AI and Nvidia GPUs, resulting in operating losses for every dollar in sales.

Atlassian, an enterprise software company with tools like Jira and Confluence, is on track to achieve consistent profitability. The company has a positive operating margin and plans to double revenue over the next five years, making it a potentially better investment than MongoDB or Snowflake.

Investors looking for safer options may consider Microsoft, a proven leader in the industry with strong fundamentals. The company generates a lot of free cash flow, reduces its share count through buybacks, and has a reasonable valuation with a P/E ratio of 36. Microsoft may be a better pick for risk-averse investors compared to struggling enterprise software companies like MongoDB and Snowflake.



Read more at Nasdaq: Should You Buy MongoDB, Snowflake, and Atlassian at Their 52-Week Lows?