MNDY Plunges 5.4% Amid AI Disruption Fears and Weak Guidance: Is This a Buying Opportunity?

Summary
• Monday.com (MNDY) tumbles 5.4% to $194.00, its lowest since March 2025
• Q3 revenue guidance falls short of estimates, sparking AI-driven software sector jitters
• 52-week high of $342.64 now 23% away, with RSI at 66.94 hinting at overbought short-term pullback

The selloff in monday.com’s stock has ignited a firestorm of speculation about AI’s disruptive potential in the software industry. With the stock trading near its 200-day moving average of $250.64 and a dynamic PE ratio of 172.44, investors are scrambling to parse whether this is a panic-driven dip or a structural shift. The day’s $192.12 low and $200.34 high underscore the volatility, as analysts debate whether AI’s rise is a tailwind or headwind for productivity platforms.

Revenue Guidance Miss and AI Fears Trigger Sell-Off
Monday.com’s 5.4% intraday drop stems from a dual blow: weaker-than-expected Q3 revenue guidance and broader fears that AI could disrupt traditional software business models. The company projected $311–313 million in Q3 revenue, below analyst estimates, while GAAP operating margins contracted to -3.9% from +0.8% a year prior. Compounding the issue, industry-wide concerns about AI-driven automation—exemplified by SAP’s 7% decline in Frankfurt—have amplified selling pressure. Analysts at RBC Capital note that the 'death of software due to AI' narrative is fueling short-term volatility, even as monday.com’s core enterprise growth metrics remain robust.

Options Playbook: Leveraging Volatility with MNDY20251121P200
• 200-day MA: $250.64 (far above current price)
• RSI: 66.94 (overbought short-term pullback)
• Bollinger Bands: Upper $208.04, Middle $190.93, Lower $173.83 (price near middle band)
• MACD: 2.31 (bullish divergence), Signal Line -0.02

Key levels to watch: 190.93 (middle Bollinger), 173.83 (lower Bollinger), and 200.00 (psychological resistance). The stock’s 53.54% upside to $298.19 per analyst consensus suggests a potential rebound, but near-term volatility remains high. With Microsoft (MSFT) down 0.7% as the sector leader, investors should monitor broader tech sentiment.

Top Option: MNDY20251121P200
• Contract Code: MNDY20251121P200
• Type: Put
• Strike Price: $200.00
• Expiration: 2025-11-21
• IV Ratio: 67.79% (high volatility)
• Leverage Ratio: 13.21% (moderate)
• Delta: -0.542 (mid-range sensitivity)
• Theta: -0.0468 (rapid time decay)
• Gamma: 0.0136 (modest price sensitivity)
• Turnover: 0 (low liquidity)

This put option offers asymmetric potential if MNDY breaks below $190.93. The 67.79% IV suggests market pricing in significant downside, while the -0.542 delta implies a 54% price sensitivity to a $1 move. Projected payoff under a 5% downside (to $184.30): max(0, 200 - 184.30) = $15.70 per contract. However, low turnover raises execution risks.

Second Option: MNDY20251121C200
• Contract Code: MNDY20251121C200
• Type: Call
• Strike Price: $200.00
• Expiration: 2025-11-21
• IV Ratio: 67.79% (same as put)
• Leverage Ratio: 13.21%
• Delta: 0.458 (mid-range bullish bias)
• Theta: -0.0468
• Gamma: 0.0136
• Turnover: 0

This call is a speculative play on a rebound above $200.00. With 13.21% leverage and 67.79% IV, it could benefit from a short-term bounce, but theta decay (-0.0468/day) and low liquidity make it a high-risk, high-reward bet. Projected payoff under a 5% upside (to $203.70): max(0, 203.70 - 200) = $3.70 per contract.

Action Insight: Aggressive bulls may consider MNDY20251121C200 into a break above $200.00, while bears should eye the $173.83 lower Bollinger level for a potential short-term entry.

Backtest monday.com Stock Performance
Key findings1. Frequency of plunges: 13 daily drops ≥ 5 % since January 2022.2. Post-event drift: The share price tends to rebound. Average cumulative excess return vs. the Nasdaq 100 ETF (QQQ) turns positive by day 4 and reaches ≈ +17 % by day 30.3. Hit ratio: The probability of being positive after a 5 %-drop is • 54 % on day 1 • 69 % on day 10 • 92 % on day 26. 4. Optimal exit window: The strongest risk-adjusted edge appears around 14–18 trading days after the plunge; average return ≈ +11 % to +16 %, all statistically significant at the 5 % level.How to read the module • “Backtest Object” = the tested ticker. • “Backtest Event” = the dates on which MNDY closed ≥ 5 % lower than the previous day. • “Backtest Period” = the analysis window you requested (2022-01-01 – 2025-11-04). • Click the thumbnail to inspect interactive charts, individual event paths, and distribution plots.Feel free to explore the module for full statistics or let me know if you’d like to tweak the entry/exit rules (e.g., add a stop-loss or different holding horizon).

MNDY at Inflection Point: Watch $190.93 Support and Microsoft’s Lead
Monday.com’s 5.4% drop has created a critical juncture for investors. While the stock’s 27% YoY revenue growth and GAAP profitability suggest long-term resilience, near-term AI-driven fears and weak guidance demand caution. The $190.93 middle Bollinger level and $173.83 lower band are key technical supports to monitor. With Microsoft (MSFT) down 0.7%, sector-wide jitters persist. For now, a disciplined approach—buying dips above $190.93 or shorting on a breakdown below $173.83—offers the most balanced strategy. The path forward hinges on whether monday.com can reframe AI as a tailwind, not a headwind.