Monday.com (MNDY) Slipped Following the Reduction in Revenue Guidance

Optimist Fund, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned +9.1% in the third quarter compared to 7.9% for the benchmark. The firm focuses on acceleration in several cyclical holdings in the portfolio that have been in multi-year downswings, while the world holds attention on the latest developments in AI. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Optimist Fund highlighted stocks such as Monday.com Ltd. (NASDAQ:MNDY). Monday.com Ltd. (NASDAQ:MNDY) develops software applications and work management tools. The one-month return of Monday.com Ltd. (NASDAQ:MNDY) was 8.35%, and its shares lost 33.60% of their value over the last 52 weeks. On October 30, 2025, Monday.com Ltd. (NASDAQ:MNDY) stock closed at $198.90 per share, with a market capitalization of $10.254 billion.

Optimist Fund stated the following regarding Monday.com Ltd. (NASDAQ:MNDY) in its third quarter 2025 investor letter:

“Monday.com Ltd. (NASDAQ:MNDY) – In August, Monday.com delivered another solid quarter, with revenue and free cash flow both rising 27% and 26% year over year, respectively. The only disappointment was a roughly $2.5 million reduction to second-half 2025 revenue guidance — a modest adjustment, but noteworthy given the company’s consistent track record of raising guidance by at least that amount at this stage of the year.

The guidance change was largely driven by weaker performance marketing trends following Google’s adjustments to how AI-generated answers are incorporated into search results. This minor headwind spooked investors, fueling concerns that Monday could be an “AI loser”…” (Click here to read the full text)

Was Jim Cramer Right About monday.com Ltd. (MNDY)?

Monday.com Ltd. (NASDAQ:MNDY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 67 hedge fund portfolios held Monday.com Ltd. (NASDAQ:MNDY) at the end of the second quarter, up from 64 in the previous quarter. While we acknowledge the risk and potential of Monday.com Ltd. (NASDAQ:MNDY) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Monday.com Ltd. (NASDAQ:MNDY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Monday.com Ltd. (NASDAQ:MNDY) and shared Carillon Eagle Small Cap Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.