What Happened?
Shares of work management platform monday.com (NASDAQ: MNDY) fell 21.4% in the morning session after the company reported fourth-quarter 2025 results that beat expectations but issued a weaker-than-expected financial outlook for 2026.
The work management software provider's revenue grew 24.6% year-over-year in the fourth quarter, and its earnings per share also topped analyst estimates. However, investors focused on the company's cautious forecast for the future. For the full year 2026, monday.com expected revenue between $1.452 billion and $1.462 billion, which fell short of Wall Street's consensus estimate of $1.48 billion. The guidance for the first quarter of 2026 also slightly missed expectations. The market's reaction showed that the disappointing outlook outweighed the solid quarterly performance.
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What Is The Market Telling Us
monday.com’s shares are very volatile and have had 25 moves greater than 5% over the last year. But moves this big are rare even for monday.com and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 8.3% on the news that the "AI replacement" narrative reached a fever pitch following the release of new models from Anthropic and OpenAI.
The simultaneous debut of Anthropic's Claude Opus 4.6 and OpenAI's "Frontier" agent platform raised concerns that autonomous agents are no longer just tools, but new operating systems that can cannibalize traditional software. This suggests that specialized applications might be reduced to mere features within frontier models, rendering legacy seat-based licensing models increasingly obsolete.
The catalyst is the models' unprecedented agentic power. Opus 4.6’s "software hunting" capability allows it to autonomously audit and patch complex codebases, while OpenAI's Frontier platform bypasses traditional CRM and ticketing interfaces to perform enterprise work directly. By commoditizing sophisticated workflows into low-cost API calls, these releases threaten the recurring revenue of software giants. As AI builds bespoke tools on demand, the market is aggressively repricing the entire software application layer.
monday.com is down 46.6% since the beginning of the year, and at $76.62 per share, it is trading 76.6% below its 52-week high of $327.92 from February 2025. Investors who bought $1,000 worth of monday.com’s shares at the IPO in June 2021 would now be looking at an investment worth $428.25.
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