AI Fuels Software Rally, Led by MongoDB, Pure Storage, Snowflake

MongoDB’s stock just wrapped up its best week *ever*, spearheading a rally among enterprise tech firms that are riding the coattails of the artificial intelligence (AI) boom.

Beyond MongoDB’s impressive 44% surge, Pure Storage skyrocketed 33%, marking its second-largest gain on record. Snowflake also joined the party, jumping 21%, while Autodesk posted a solid 8.4% increase.

Since generative AI took center stage in late 2022 with the debut of OpenAI’s ChatGPT, the biggest beneficiaries have been Nvidia, thanks to its coveted graphics processing units (GPUs), and cloud giants like Microsoft, Google, and Oracle. Companies packaging and distributing these GPUs, such as Dell and Super Micro Computer, have also seen a surge in demand.

For many cloud software vendors and enterprise tech players, the million-dollar question has been whether AI will be a catalyst for growth or a disruptive force. Wall Street has eagerly awaited signs of which way the wind is blowing.

This week’s quarterly results and executive commentary seem to have allayed some fears, suggesting that the financial dividends of AI are beginning to trickle down to a broader range of companies.

MongoDB CEO Dev Ittycheria shared on CNBC’s “Squawk Box” that enterprise adoption of AI services is underway, albeit at a measured pace.

“We’re seeing deployments of AI agents to automate back-office functions and streamline sales and marketing,” Ittycheria noted. “But it’s not yet in full swing across the enterprise. Companies want to see tangible results before committing to further investment.”

MongoDB, known for its cloud database services, reported a robust 24% year-over-year revenue increase, reaching $591 million and surpassing the $556 million consensus estimate. Earnings also exceeded expectations, as did the company’s full-year forecast for both profit and revenue.

MongoDB highlighted in its earnings report that it added over 5,000 new customers year-to-date, “the highest number ever for the first half of the year.”

Ittycheria views this as a promising sign for future growth, noting, “Many of these new customers are AI-native companies turning to MongoDB to power their businesses.”

Pure Storage enjoyed a record surge on Thursday, with its stock soaring 32% to an all-time high.

The data storage management vendor’s quarterly results exceeded estimates, leading to an upward revision of its full-year guidance. However, the real excitement stems from early returns on Pure’s recent deal with Meta. Pure is tasked with helping the social media behemoth efficiently manage its massive storage needs in the face of growing AI demands.

Pure reported recognizing revenue from its Meta deployments in the second quarter. Finance chief Tarek Robbiati indicated on the earnings call that the company is witnessing “increased interest from other hyperscalers” seeking to replace their legacy storage infrastructure with Pure’s cutting-edge technology.

The strong reports from MongoDB and Pure coincided with Nvidia’s stellar quarterly earnings, where the chipmaker reported a staggering 56% year-over-year revenue increase, marking its ninth consecutive quarter of growth exceeding 50%.

Nvidia has cemented its position as the world’s most valuable company, fueled by the insatiable demand for its advanced AI processors from infrastructure providers and model developers alike.

While Nvidia’s growth has moderated from the triple-digit rates seen in 2023 and 2024, it continues to expand at a far faster pace than its megacap counterparts, suggesting that the AI build-out still has considerable runway.

“It was a banger of a report,” declared Brad Gerstner, CEO of Altimeter Capital, during an interview on CNBC’s “Halftime Report.” “This company is accelerating at scale.”

Data analytics powerhouse Snowflake touted its Snowflake AI Data Cloud in its quarterly earnings report on Wednesday.

Snowflake shares jumped 20% on the back of better-than-expected earnings and revenue. The company also raised its product revenue guidance for the year, revealing that over 6,100 customers are now leveraging Snowflake AI, up from 5,200 in the previous quarter.

“Our progress with AI has been remarkable,” stated Snowflake CEO Sridhar Ramaswamy on the earnings call. “Today, AI is a core reason why customers are choosing Snowflake, influencing nearly 50% of new logos won in Q2.”

Autodesk, a veteran founded in 1982, has a longer history than MongoDB, Pure Storage, and Snowflake. The company is best known for its AutoCAD software, a staple in the architecture and construction industries.

Autodesk has lagged behind the broader tech sector recently. Last year, activist investor Starboard Value initiated a position in the stock, advocating for operational enhancements and improved financial performance, including cost reductions. In February, Autodesk slashed 9% of its workforce, and two months later, the company reached a settlement with Starboard, adding two new directors to its board.

While the stock continues to trail the Nasdaq year-to-date, it surged 9.1% on Friday following Autodesk’s earnings report, which exceeded Wall Street estimates and led to an increase in its full-year revenue guidance.

Last year, Autodesk unveiled Project Bernini, an initiative focused on developing new AI models and creating what it terms “AI-driven CAD engines.”

During Thursday’s earnings call, CEO Andrew Anagnost was asked about the most exciting AI applications within Autodesk’s product portfolio.

Anagnost emphasized Autodesk’s ability to streamline workflows across products and highlighted the Autodesk Assistant as a productivity-enhancing tool powered by simple prompts.

He also directly addressed the perceived threat that AI poses to software companies, asserting, “AI may eat software, but it’s not gonna eat Autodesk.”