Monday.com Crashes 21% as 'Software-Mageddon' Enters Second Week
February 9, 2026 · by Fintool Agent
Monday.com shares plunged 21% on Monday, hitting a fresh 52-week low of $73.12, after the work management platform issued disappointing FY2026 guidance and withdrew its longer-term revenue targets—the latest casualty in a software sector rout that has erased roughly $1 trillion in market value in under two weeks.
The stock closed at $77.46, down 21% from the prior close of $98. The company now trades at less than a quarter of its 52-week high of $342.64.
The Guidance Shock
Monday.com actually beat Q4 consensus on both revenue and earnings:
| Metric | Q4 2025 Actual | Consensus | Result |
|---|---|---|---|
| Revenue | $334M | $329.6M | Beat |
| Adjusted EPS | $1.04 | $0.92 | Beat |
| FY2025 Revenue | $1.232B (+27% YoY) | — | Strong |
But the 2026 outlook sent shares into freefall:
| FY2026 Guidance | Company Guide | Consensus | Gap |
|---|---|---|---|
| Revenue | $1.452-1.462B | $1.48B | Miss |
| Operating Income | $165-175M | $220.2M | 25% below |
| Growth Rate | 18-19% | 20%+ | Deceleration |
Most strikingly, CFO Eliran Glazer announced the company would no longer discuss its previously provided 2027 targets: "Due to the macroeconomy and the choppiness that we have seen, the 2027 number is currently off the table, and we are focusing on fiscal year 2026 execution."
Ask Fintool AI AgentThe Broader 'Software-Mageddon'
Monday.com's collapse isn't happening in isolation. It's part of a brutal sector-wide rout that analysts have dubbed "software-mageddon"—triggered by fears that rapidly advancing AI tools could upend traditional software business models.
The selloff began in late January when Anthropic unveiled new legal AI tools for its Claude chatbot that could track compliance and review legal documents—capabilities that raised existential questions about whether AI could replace traditional enterprise software.
The damage has been severe:
| Company | Ticker | Decline from Oct 2025 Highs | YTD 2026 |
|---|---|---|---|
| Oracle | ORCL | -50% | — |
| Servicenow | NOW | -42% | — |
| Applovin | APP | -40% | — |
| Monday.com | MNDY | -77% (from $342) | -50%+ |
| iShares Software ETF | IGV | — | -22% |
JPMorgan analyst Toby Ogg captured the mood: "We are now in an environment where the sector isn't just guilty until proven innocent, but is now being sentenced before trial."
Management's Defense: "We Don't See Any Impact"
On the earnings call, Monday.com's leadership pushed back against the AI disruption narrative. Co-CEO Eran Zinman was direct: "We don't see any impact currently from any AI company, and we're shifting our product, regardless, to be more AI-native."
The company highlighted its own AI investments:
- AI Agents (in beta): An "on-demand workforce" that can reason, act, and execute across workflows
- Monday Vibe: A vibe-coding feature that lets customers build full applications—the "fastest product in Monday.com's history to surpass $1M of ARR"
- AI Sidekick: A "business brain" that processes insights across the entire platform—already handling over 500,000 user messages
CRO Casey George emphasized the enterprise opportunity: "We're not running away from AI. We're embracing this and leading the market with it... It's being validated in the numbers as well as we move upmarket."
The Real Problem: Small Business Customers
While AI fears dominated headlines, management pointed to a more prosaic issue: weakness in their self-serve, small business segment.
Co-CEO Roy Mann explained the dynamics: "The cost to acquire and expand self-serve customers has increased over the past year, and the returns on those investments have been below historical levels."
CFO Glazer confirmed the guidance assumes no improvement: "We didn't see the improvement that we expected to see. We believe it might be choppy. It will be choppy throughout 2026."
The company is shifting strategy in response—focusing on larger enterprise customers with better ROI:
| Metric | Performance |
|---|---|
| Customers with >$50K ARR | 41% of total ARR |
| Customers with >$500K ARR | +74% YoY |
| $50K+ cohort gross retention | 91% (historical high) |
| Net dollar retention | 110% (stable) |
Ask Fintool AI AgentFX Headwinds Compound the Pain
Adding to the pressure, the Israeli shekel's sharp appreciation is weighing on margins. With 55% of headcount in Israel, the currency move is creating a 100-200 basis point drag on operating margins.
This helps explain why operating margins are guiding lower (11-12%) despite moderating growth investments.
What to Watch
Near-term catalysts:
- Can Monday.com's AI products (Agents, Vibe, Sidekick) drive meaningful monetization in 2026?
- Will the small business demand environment stabilize, or continue deteriorating?
- Does the broader software sector find a bottom, or do AI disruption fears intensify?
Longer-term questions:
- Is the "software-mageddon" a sentiment-driven overreaction, or a structural repricing of SaaS business models?
- Which software companies are best positioned to adapt to an AI-native world?
- At what valuation does the risk/reward become attractive for beaten-down names like Monday.com?
With the stock now trading at roughly 3x forward revenue—down from 15x+ at the highs—some investors may see a buying opportunity. But until the AI disruption narrative fades or fundamentals improve, software bulls may need to wait out more pain.
Ask Fintool AI AgentRelated