BofA Downgrades monday.com to Neutral on Google AI Overviews Risk

BofA Securities analyst Michael Funk downgraded Monday.com (MNDY) to Neutral with a price target of $205, citing increasing risks from Google's integration of AI Overviews into search results, which are eroding the company's web traffic and threatening its self-serve business model. The downgrade follows a review of Monday.com's web traffic by marketing channel, which showed a 23.5% YoY decline in SEO-driven website visits in 2Q25 and accelerating declines in July. Funk trimmed his 2026 revenue estimates and lowered his price target.

BofA Securities analyst Michael Funk has downgraded Monday.com (NASDAQ: MNDY) to Neutral, lowering the price target to $205. The downgrade follows a comprehensive review of Monday.com's web traffic by marketing channel, revealing significant risks from Google's integration of AI Overviews into search results. These developments are eroding the company's web traffic and threatening its self-serve business model.

According to the analyst, Monday.com experienced a 23.5% year-over-year decline in SEO-driven website visits in the second quarter of 2025, with the decline accelerating to 25.3% in July. Funk cited these trends as a major concern, noting that less than 30% of signups come from Google. The analyst built a framework using Similarweb data to gauge the growth impact, concluding that ongoing fundamental challenges and AI-driven search risks make the risk/reward profile balanced.

Funk trimmed his 2026 revenue estimates and lowered his price target from $240 to $205. He warned that if July 2025 traffic declines persist, Monday.com could face meaningful self-serve headwinds in the second half of 2025 and 2026. Extending July’s traffic trends forward, Funk's analysis implies a 5.2% decline in self-serve gross ARR added in 2026, translating to about a 2-point drag on total gross ARR added for that year.

Monday.com shares are trading lower by 1.33% to $171.07 at last check Thursday. The company develops software applications globally, offering a cloud-based Work OS for creating work management tools. While the potential of MNDY as an investment is acknowledged, Funk believes certain AI stocks offer greater upside potential and carry less downside risk.

References:
[1] https://finance.yahoo.com/news/monday-com-stock-slides-seo-173524254.html
[2] https://finance.yahoo.com/news/bofa-cuts-monday-com-mndy-031434744.html