Monday.com Stock Slides Amid SEO Traffic Decline and Rising Marketing Costs

Monday.com Ltd. (MNDY) shares are trading lower after a Bank of America Securities analyst downgraded the stock from Buy to Neutral, citing concerns about growth due to declining SEO-driven traffic and rising marketing costs. The analyst estimates that if July 2025 traffic declines persist, Monday.com could see self-serve headwinds in the second half of 2025 and 2026, leading to a 5.2% decline in self-serve gross ARR added in 2026.

Monday.com Ltd. (NASDAQ: MNDY) shares are trading lower after a Bank of America Securities analyst downgraded the stock from "Buy" to "Neutral," citing concerns about growth due to declining SEO-driven traffic and rising marketing costs. The analyst estimates that if July 2025 traffic declines persist, Monday.com could see self-serve headwinds in the second half of 2025 and 2026, leading to a 5.2% decline in self-serve gross ARR added in 2026 [2].

The downgrade comes as SEO-driven web traffic has reportedly seen a notable decline, with a 23.5% year-over-year decrease in the second quarter of 2025, worsening to 25.3% in July [2]. This trend is attributed to Google's broader rollout of AI Overviews, which could impact how customers discover and interact with Monday.com's platform. The company's reliance on SEO for customer acquisition makes this a significant concern.

Bank of America Securities analyst Matt Bullock noted that while shares are already down 30% since the second quarter earnings, ongoing fundamental challenges and AI-driven search risks make the risk/reward balanced [2]. Bullock warned that if July 2025 traffic declines persist, Monday.com could face meaningful self-serve headwinds in the second half of 2025 and 2026.

Monday.com's stock has been volatile, with 29 moves greater than 5% over the last year. Today's move indicates the market considers the news meaningful but not something that would fundamentally change its perception of the business [1]. Despite robust revenue growth and non-GAAP profitability in the second quarter, the market responded negatively to concerns around operating margin compression and uncertainty in customer acquisition channels [3].

Investors should keep an eye on how effectively Monday.com monetizes its new AI-driven features and expands enterprise customer adoption in the coming quarters. Additionally, the pace of recovery in small business customer acquisition as digital marketing channels evolve will be key markers of execution.

References:

[1] https://finance.yahoo.com/news/why-monday-com-mndy-stock-151551567.html
[2] https://finance.yahoo.com/news/monday-com-stock-slides-seo-173524254.html
[3] https://finance.yahoo.com/news/5-insightful-analyst-questions-monday-053131017.html