What Should Investors Do With the New Wave of IPOs?

Motley Fool Staff, The Motley Fool Sun, May 17, 2026 at 5:30 AM GMT+7 22 min read CBRS In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Jon Quast, Matt Frankel, and Rachel Warren discuss: Monday.com’s financial results for the first quarter of 2026. Mailbag: Trim my winners to raise cash or deploy new cash? To catch full episodes of all The Motley Fool s free podcasts, check out our podcast center. When you re ready to invest, check out this top 10 list of stocks to buy. Will AI create the world s first trillionaire? Our team just released a report on a little-known company, called an "Indispensable Monopoly," providing the critical technology Nvidia and Intel both need. Continue » Before you buy stock in Cerebras Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cerebras Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $469,293!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,332!* Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 207% for the S&P 500. Don t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. *Stock Advisor returns as of May 16, 2026. This podcast was recorded on May 11, 2026. Jon Quast: What should investors do with a new wave of IPOs coming? You re listening to Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I m Jon Quast, and I m joined today by Fool contributors Matt Frankel and Rachel Warren. Later in the show, we do want to talk about a new IPO that is coming to market, as well as a question from you regarding what to do with new IPOs when they do go public. But first, we wanted to talk about earnings report that came out this morning and that is from Monday.com. This is a enterprise software company, and we ve been talking about the death of SAT stocks. And this reminds me of the Monty Python routine where they re saying, bring out your dead, and the one guys like, I m not dead yet. I m actually getting better. Monday.com gets lumped in with the stocks that are doomed, and it reported today. The market apparently loved it. Because, man, the stock jumped about 25% in pre-market trading. I see it s down from that now that we re recording, but this is a stock that got hammered down over 70% over the last year, but there must have been something here that the market liked, Rachel. Rachel Warren: The stock has taken a massive beating over the last year, down significantly. It s worth noting, Monday.com stock is still down about 50% year to date at the time that we re recording this episode. I think what we ve been seeing is really, I think a lot of the market appetite that s been surrounding a lot of software stocks. This fear that generative AI will either disrupt Monday.com s customer acquisition, maybe render its project management tools obsolete. But certainly, there were a few things that the market liked. For starters, Monday.com beat analyst expectations on the top line with $351 million in revenue. That was a 24% year-over-year increase. The company also delivered adjusted earnings per share of $1.15. That s compared to what analysts were guiding for of just $0.93 a share. Management also raised their guidance for 2026. They re now looking to bring in about 1.5 billion in revenue. The launch of their new AI work platform, also, net dollar retention rate was 110%. There were certainly some good numbers that the market seems to like. Matt Frankel: In a nutshell, the market was pricing in three things, rapidly slowing growth, margin compression, and the risk of AI disruption. This quarter really showed better than expected results when it comes to all three of those things. Rachel noted that Monday beat expectations on the top and bottom line. They give excellent guidance. Beyond those headlines, looking at RPOs remaining performance obligations, which is future booked work, that was up 33% year-over-year. Anytime you see future revenue growing faster than current revenue, it s generally a good sign, and the market takes it as such. Enterprise customer expansion is a very impressive story. Monday s clients that account for more than $100,000 in annual recurring revenue, that grew by 39% year-over-year in the quarter, much higher than the overall top line. Those tend to be very sticky customers, so that s a part of the story the market s really paying attention to. Management specifically pointed out that 10% of new annual recurring revenue was driven by AI specifically, and that i

What Should Investors Do With the New Wave of IPOs?

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