Better Database Stock: Oracle vs. MongoDB

Oracle Overview - Oracle is a stable stock with a long-standing presence in the tech industry, serving as the world's largest database management company [2] - The company derives most of its revenue from cloud services and license support, including database services, applications, and cloud infrastructure [2] - Oracle holds approximately 2% of the cloud market share, which is critical for supporting AI and maintaining relevance in the database market [2] - In Q1 FY2025, Oracle reported $13 billion in revenue, a 6$2.9 billion due to controlled operating expense growth [3] - Oracle's stock has risen approximately 25% over the past year, but its valuation metrics (P/E ratio of 42 and P/S ratio of 8) may raise concerns despite 20%+ earnings growth [3][4] MongoDB Overview - MongoDB, founded in 2007, is a newer player in the database industry, offering a non-relational database (Atlas) that can store unstructured data types [1][5] - MongoDB's Atlas database has over 85 million downloads and 1 million developers in its community, with many prominent corporations using its services [5] - In Q2 FY2025, MongoDB reported $478 million in revenue, a 13$55 million loss in Q2 FY2025, up from a $38 million loss in the same period last year [6] - MongoDB's stock has declined over 20% in the past year, and its P/S ratio of 12 may deter investors given its slowing growth and lack of profitability [6] Industry Dynamics - The nature of data has evolved with increased computing capabilities, prompting MongoDB to introduce non-relational databases to handle unstructured data [1] - Oracle has responded to this shift by introducing its own non-relational database and expanding into the cloud infrastructure business [1] - Non-relational databases like MongoDB's Atlas are gaining traction due to their ability to manage unstructured data types, such as videos and abstract text, which traditional relational databases struggle with [5] Investment Considerations - Oracle is seen as a more stable investment due to its profitability, lower valuation, and continued growth in software and cloud services [7] - MongoDB's non-relational database poses a potential long-term challenge to Oracle's traditional database model, but its decelerating growth and lack of profitability make it a less attractive investment at its current valuation [7]