GitLab Bets Big On AI Code Explosion — And Wall Street's Buying In

In a rapidly evolving tech landscape where cloud computing and generative AI are reshaping industries, GitLab Inc. (NASDAQ:GTLB) finds itself at the forefront of this transformation.

Growing demand for and increasing complexity of modern cloud and emerging GenAI applications provide Gitlab "significant runway for growth," according to Rosenblatt Securities.

The Gitlab Analyst: Analyst Blair Abernethy initiated coverage with a Buy rating and price target of $58 on Tuesday.

The Gitlab Thesis: GenAI is likely to "further commoditize parts of software code generation" and other aspects of the Software Development Lifecycle (SDLC), Abernethy said in the initiation note.

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"The commoditization of code generation should eventually drive significantly more code, programs and complex software systems to be created, and that expanding code base will need to be managed in a platform like GitLab," the analyst wrote.

The company also upsells AI products throughout its offering, he added.

Only around 25% of paid users have GitLab's more expensive Ultimate account, which provides "ample upsell opportunity in the 10k+ customer base," Abernethy stated. "Further, several new AI-driven add-on products are just starting to add to ARR," he wrote.

GTLB Price Action: Shares of Gitlab rose by 0.78% to close at $42.90 on Tuesday.

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