Guggenheim bullish on Atlassian and GitLab as AI adoption to fuel growth

Guggenheim initiated 'Buy' ratings on Atlassian (TEAM) and GitLab (GTLB), asserting that AI tools will enhance, rather than undermine, demand for their software platforms. For Atlassian, Guggenheim set a $225 price target (30% upside), citing its broad 'System of Work' strategy and expected revenue reacceleration to 22% in fiscal 2026, driven by increased AI-driven collaboration. GitLab received a $70 target (43% upside), with Guggenheim highlighting its leading DevSecOps platform and projecting 27% revenue growth in fiscal 2026, as AI code assistants are seen augmenting developer workflows. The brokerage posits both companies are well-positioned to benefit from AI adoption by increasing demand for workflow collaboration and secure software development.

Analysis

Guggenheim has initiated coverage on Atlassian (TEAM) and GitLab (GTLB) with 'Buy' ratings, presenting a strong counter-narrative to concerns that AI will diminish demand for their platforms. The brokerage argues that AI tools will instead augment developer workflows, increasing the need for collaboration and integrated security, thereby benefiting both companies. For Atlassian, Guggenheim set a $225 price target (~30% upside), forecasting revenue to reaccelerate to 22% in fiscal 2026, ahead of guidance. This is supported by the view that Atlassian has only penetrated 20% of its market and that its 'System of Work' strategy, cloud adoption, and AI workflows via Rovo will drive it toward a $10 billion revenue target by 2029. For GitLab, a $70 price target (~43% upside) was issued, labeling it the 'leading enterprise-focused DevSecOps platform' with retention rates exceeding 95%. Guggenheim dismisses fears regarding GitLab's seat-based model as 'overblown,' projecting revenue growth of 27% in fiscal 2026, above consensus, driven by its Duo AI suite and continued double-digit growth in its paid user base.

Key Decisions for Investors

• Investors should consider the initiation of 'Buy' ratings as a signal to re-evaluate the prevailing market narrative that AI poses a threat to Atlassian and GitLab; Guggenheim's thesis suggests AI is a significant tailwind.
• For Atlassian (TEAM), the projected revenue reacceleration to 22% in FY26, which is above guidance, and the long-term $10B revenue target present potential upside that may not be fully priced in.
• For GitLab (GTLB), the combination of a high 43% upside target, market leadership in enterprise DevSecOps, and retention above 95% indicates the stock could be attractive, especially if concerns about its business model are indeed 'overblown' as stated.
• Monitor key metrics such as paid user growth, adoption of AI-native features like Rovo and Duo, and enterprise developer headcount trends to validate the thesis that AI is complementing, rather than replacing, these platforms.