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

Investing.com -- Guggenheim initiated coverage on Atlassian and GitLab with Buy ratings, saying Ai tools will enhance, not undermine, demand for their software platforms.

On Atlassian, the brokerage set a $225 price target, about 30% upside, and said the company’s broad “System of Work” strategy leaves room for expansion even if AI coding tools reduce entry-level developer jobs.

“We don’t view this as the death knell for Atlassian,” analysts wrote.

Global developer headcount continues to rise and AI-driven app development should increase usage of collaboration products like Jira and Confluence.

Analysts said Atlassian has penetrated at most 20% of its global opportunity, with revenue expected to reaccelerate to 22% in fiscal 2026, ahead of guidance.

Guggenheim added that cloud adoption, service management and AI workflows via Rovo should support the company’s long-term $10 billion revenue target for 2029.

For GitLab, Guggenheim set a $70 target, that is around 43% upside.

Analysts described the company as “the leading enterprise-focused DevSecOps platform” with retention above 95%.

They said concerns that AI coding assistants could replace developers and threaten GitLab’s seat-based model were “overblown.”

GitLab’s paid user base has grown at a double-digit pace over the last year, a trend Guggenheim expects to continue, helped by its Duo AI suite and Ultimate tier.

The brokerage projects revenue growth of 27% in fiscal 2026, above consensus, with further gains in fiscal 2027 as new ARR accelerates.

“AI code assistants primarily augment developer workflows and complement GitLab’s comprehensive DevSecOps platform,” analysts wrote, adding that internal surveys show most enterprises plan to grow developer headcount.

Both companies, according to Guggenheim, stand to benefit from AI adoption that increases demand for workflow collaboration and secure software development.

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