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Here's How MongoDB, Inc. Shares Gained 31% in May

Anders Bylund, The Motley Fool

What happened

Shares of database systems expert MongoDB (NASDAQ: MDB) gained 31% in May 2018, according to data from S&P Global Market Intelligence. These gains were achieved despite a relative lack of market-moving news.

So what

MongoDB didn't have a whole lot of real news to share last month, resting up to deliver an eye-popping earnings report in early June. That being said, a couple of positive events combined to lift the stock without triggering any sharp jumps along the way.

Various bar charts and line graphs overlaying each other

Image source: Getty Images.

Several large hedge funds disclosed new or increased positions in MongoDB in May. For example, Whale Rock Capital Management nearly doubled its MongoDB holdings in early May and now owns roughly 16% of the company's voting stock. Big investors taking a larger piece of the pie is often seen as a vote of confidence in the underlying business, and Whale Rock has not suggested that it wants to push for any changes to MongoDB's strategy or operations.

At least two analyst firms saw fit to raise their already bullish price targets on the stock, citing long-term growth in cloud computing and the fact that the recent gaming phenomenon Fortnite depends on MongoDB's NoSQL databases on the back end.

Now what

If nothing else, having MongoDB databases supporting nearly 4 million concurrent Fortnite players shows that the platform is well-suited for large and demanding workloads that used to be the exclusive domain of traditional database systems made by enterprise-grade giant Oracle and its peers. MongoDB is starting to look like a credible alternative to those expensive and often unwieldy systems.

So it's not really a surprise to see MongoDB shares climbing higher even in a month with few direct growth drivers. The Fortnite connection alone should be enough to keep investors interested, and the scalability prowess that game helped MongoDB demonstrate will come in handy long after Fortnite becomes old hat. At this point, MongoDB investors have seen an 82% return since its IPO last September, and seemingly for good reason.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends MongoDB. The Motley Fool owns shares of ORCL and has the following options: short June 2018 $52 calls on ORCL and long January 2020 $30 calls on ORCL. The Motley Fool has a disclosure policy.