J.P. Morgan: Monday.com expands its AI product scope; JPMorgan still awaits evidence of core business resilience

Why is product expansion not yet enough to change the bank’s assessment?

At the Elevate investor Q&A, management highlighted the Frontier service, the Harmony voice AI product and a potential brand change, seeking to expand beyond work management, customer relationship management, service and development tools into a broader market.
JPMorgan recognizes the innovation and product development progress of these early-stage initiatives, but believes they will take time to significantly improve growth; meanwhile, the company offered limited new arguments about how its core business can withstand AI disruption.
The bank considers the company’s valuation low among software stocks and views improvements in capital returns and employee efficiency positively, but remains on the sidelines because it is still unclear when the growth slowdown will bottom out.

Frontier combines service teams with forward-deployed engineers to help customers identify AI application opportunities and drive business change. The company plans to hire this year and next and offer the service to most existing customers.
Launched on 19 October, Harmony is a standalone voice AI agent product for midsize and large enterprises. It uses acquired OneAI technology and task-specific models, and has a separate website and go-to-market operation.
The company had previously announced a shift from work management to an “AI work platform.” It also floated the idea of changing its logo and gradually retiring the monday.com brand, hoping to move beyond customers’ perception of it as only a project management platform.

Management observed that enterprise customers adopt AI more extensively than small and midsize businesses, and that time invested in enterprise customers also yields higher returns. Frontier therefore targets midsize and large enterprises.
However, customers with annual recurring revenue below 50 thousand dollars still contribute a substantial share of total annual recurring revenue. Frontier will not expand deployment for these small and midsize customers; the company will provide prebuilt assets and services through partners to help them adopt AI features.
Customers consolidating vendors and migrating deeply integrated workflows typically slow deals; on the other hand, hybrid seat-and-usage pricing and a unified allowance create room for revenue from a single account to grow faster than headcount.

On 22 July, the company announced layoffs of approximately 20%, with expected annual savings of approximately 100 million dollars, most of which will be reinvested in AI and hiring. Management also believes that, as salespeople automate work using the platform, sales headcount need not rise linearly in step with business growth.
Management said 30% of internally written code is generated autonomously by AI; all internal code is written by AI under developer supervision. This is an example the company gave of improving internal efficiency.
As of the second quarter of 2026, the 870 million-dollar buyback authorization had been fully used. The chief financial officer said there are currently no plans for additional buybacks and that the company is retaining cash for operations and acquisitions.