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GitLab played up its AI credentials and investors are loving it.
GitLab
GitLab
stock is surging more than 28% early Tuesday. There’s a good chance a move like that these days by a software stock is down to one thing—AI.
The company certainly played up its AI credentials when it reported fiscal first-quarter earnings late Monday, and investors clearly liked what they heard.
GitLab
is a DevSecOps platform, which helps companies develop, secure, and operate software. CEO Sid Sijbrandij said it is positioned as the leading AI-powered DevSecOps as management outlined the opportunities ahead.
“Against a backdrop of macroeconomic uncertainty, customers are looking to our AI-powered DevSecOps platform to drive efficiencies, increase productivity, and accelerate their pace of innovation. We are poised to make the most of the estimated $40 billion total addressable market opportunity before us,” Chief Financial Officer Brian Robins said.
Those comments, along with earnings that beat expectations, were enough to send the stock soaring to $44.63 ahead of the open.
D.A. Davidson analyst Gil Luria raised his price target on the stock to $45 from $30 due to “higher estimates as GitLab benefits from generative AI headwinds.”
However, he maintained a Neutral rating, noting the stock after hours was close to where it was when the company guided for steep revenue deceleration in the fiscal year 2024. “While first-quarter results were certainly a step in the right direction, the guide still represents considerable deceleration,” he added.
GitLab posted an adjusted loss of 6 cents per share in its fiscal first quarter, beating analysts’ estimates of a 14 cents-per-share loss, according to FactSet data. Second-quarter revenue guidance of between $129 million and $130 million, also came in ahead of estimates of $127 million.
Write to Callum Keown at callum.keown@barrons.com
