Key Points
Monday.com is a software provider that investors think will be disrupted by AI.
The business continues to grow at a double-digit rate.
The stock's shares look much cheaper today than a few years ago.
Shares of Monday.com (NASDAQ: MNDY) fell a whopping 50.9% in 2026, according to data from S&P Global Market Intelligence. The software provider for business workflows has been deemed a massive loser due to the artificial intelligence (AI) revolution, which has brought down much of the software sector.
Despite this narrative, the company continues to deliver double-digit revenue growth. Does that make the stock a buy-the-dip candidate down 81% from highs?
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A narrative of AI disruption
Software providers like Monday.com are taking a beating because of the rising threat of AI coding agents. The company offers software that helps managers divide tasks for work projects, usable by large and small teams alike. It is meant to help organize work in the digital age, and is especially beneficial for remote worker teams.
Investors' idea is that companies can use new AI coding tools like Claude Code to spin up their own copies of Monday.com for their businesses. This will lead to customer attrition and the eventual decline of Monday.com's business model.
It is this narrative entirely that has dragged down Monday.com stock, because the numbers it is putting up show no signs of disruption right now. Revenue grew by 24% year-over-year in the first quarter of 2026, with enterprise customers contributing more than $500,000 in annual recurring revenue (ARR), growing even faster, up 74% year-over-year. Profitability is also improving, with operating earnings doubling to around $20 million in the period.
Image source: Getty Images.
Time to buy the dip?
After this drawdown, Monday.com now trades at a price-to-sales ratio (P/S) of just 3.3. For a company with strong gross margins of 89%, this could potentially prove a very cheap sales multiple if Monday.com can keep delivering revenue growth and bottom-line margin expansion at greater scale.
The big question is whether AI is actually disrupting the business. If it were, the numbers would point to enterprises churning away from Monday.com, when in fact the opposite is happening: enterprises are its fastest-growing segment. While AI software is a fast-moving field, it will likely not destroy Monday.com's business overnight, if it ever does.
These AI fears are placing a huge discount on enterprise software stocks compared to their historical averages. If you believe that Monday.com will skate through fine to the other side, shares look cheap enough to finally buy the dip for the rest of 2026 and beyond.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monday.com. The Motley Fool has a disclosure policy.