Monday.com’s quiet stock decision reveals a bigger shift in Silicon Valley
The cancellation of 10.8 million reserved shares comes as investors question whether traditional SaaS companies can maintain their old growth models in the AI era.
For years, technology companies relied on large stock option grants to attract and retain employees in a highly competitive talent market. But a recent move by monday.com suggests that the era of constantly expanding equity pools may be changing as artificial intelligence allows companies to grow more efficiently.
The Tel Aviv-based workplace software company disclosed in a regulatory filing on Friday that its board had canceled 10,875,000 unissued ordinary shares that had been reserved for employee incentives. The company said the move was intended to reduce unnecessary dilution for existing shareholders and would not affect existing employee stock options or restricted stock units (RSUs).
The decision comes as software companies are facing growing pressure from investors over the impact of AI on their business models. As AI tools become capable of performing more tasks previously handled by employees, investors are questioning whether traditional software companies will continue needing the same level of hiring and spending that fueled growth over the past decade.
Monday.com has been at the center of those concerns. Despite continued growth and improving profitability, its stock has declined sharply over the past year as investors reassess the future of software-as-a-service (SaaS) companies in the AI era.
The company, however, has argued that AI can strengthen its business rather than threaten it. In its first-quarter results published earlier this year, monday.com reported revenue of $351.3 million, up 24% year-over-year, while operating profit doubled to $20 million. The company maintained its full-year forecast of approximately $1.46 billion in revenue, representing annual growth of about 20%.
Monday.com has also adjusted its own operations as it focuses on efficiency. Earlier this year, the company decided not to proceed at this stage with a planned 1,000-square-meter expansion at the EcoTower complex, which it had announced in 2025, and instead opted to temporarily add three floors at the nearby Sonol Tower. The company said the decision followed a reassessment of its long-term real estate needs.
Management said that internal adoption of AI tools has helped increase productivity and allowed the company to continue growing without expanding its workforce at the same pace.
"As AI addresses more and more aspects of work for our customers, our business grows with it," monday.com co-founders Roy Mann and Eran Zinman said following the quarterly results. "We believe that the most significant chapter in monday's story is the one we are writing now."
The cancellation of unused shares reflects this broader shift. If companies can generate more revenue with fewer additional employees, they may no longer need to maintain the large equity reserves that became common during the technology boom.
