Investment Opportunity - GitLab (NASDAQ: GTLB) presents an attractive investment opportunity due to its potential to benefit from the AI industry boom [1] - The company's new AI solutions and growth strategy are key drivers of its future success [1] Analyst's Background - The analyst has over 7 years of experience in the buy-side, with a focus on fundamental bottom-up analysis and quantitative modeling [1] - The analyst specializes in identifying perception gaps to capitalize on over-pessimism and excessive exuberance [1]

AI Investment Opportunities - Stocks with market capitalizations under $10 billion offer significant growth potential if their AI-driven businesses succeed [1] - SoundHound AI and GitLab are two mid-cap stocks showing early success in AI, making them potential candidates for investment in 2025 [2] Company Overview - SoundHound operates a voice AI platform called Houndify, which uses speech-to-meaning and deep-meaning-understanding technologies to enable natural voice interactions [4] - GitLab provides a DevSecOps platform with AI-powered tools for secure software development, including code suggestions and automation [5] Revenue Growth - SoundHound's revenue grew by 89% year-over-year in fiscal 2025 Q3, reaching $25.1 million, partly due to its acquisition of Amelia [6] - GitLab's revenue grew by 31% to $196 million in the same quarter, maintaining a consistent growth rate of 30%-40% over the past six quarters [6] Gross Margins - SoundHound's gross margins were 49% in the last quarter, while GitLab's gross margins were significantly higher at 89% [7] - Higher gross margins for GitLab indicate a stronger ability to convert revenue into profits compared to SoundHound [7] Future Opportunities - SoundHound aims to become an AI commerce voice platform, addressing complex interactions across multiple industries, such as healthcare and banking [9] - GitLab's growth is driven by its GitLab Duo AI add-on and the adoption of its higher-tier platform Ultimate, which now accounts for 48% of its customer base [8] Competitive Landscape - SoundHound faces strong competition from companies like Salesforce and Microsoft, which have developed advanced AI voice and customer service solutions [10] - GitLab's GitLab Dedicated solution, offering data isolation and regional data residency, has gained traction, further solidifying its market position [8] Valuation - GitLab trades at a price-to-sales (P/S) multiple of 9.9 times 2025 analyst estimates, making it cheaper than SoundHound, which trades at over 23.5 times [12] - GitLab's superior gross margins and established business model make it a more attractive investment compared to SoundHound [13]

Cathie Wood has purchased over 1 million shares of software stock GitLab over the last few weeks.Cathie Wood is the CEO and chief investment officer of Ark Invest. Over the last several years, she has earned a reputation for making overly bullish calls on companies that may typically lack the full attention of the rest of Wall Street.Another aspect of Wood's investment prowess that is quite uncommon is that she has Ark publish its trading activity on a daily basis. With this in mind, it's never a question o ...

Market Outlook - Investors face tough choices in 2025 due to rising valuations and a potentially correction-prone market [1] - The field of buyable stocks is narrow, indicating limited opportunities for growth exposure [1] Analyst Background - Gary Alexander has combined experience covering technology companies on Wall Street and working in Silicon Valley [1] - He serves as an outside adviser to several seed-round startups, providing exposure to industry-shaping themes [1] - He has been a regular contributor on Seeking Alpha since 2017 and is quoted in many web publications [1] - His articles are syndicated to company pages in popular trading apps like Robinhood [1]

GitLab (GTLB) shares have jumped 20.6% in the trailing six-month period, outperforming the Zacks Computer & Technology sector’s return of 2.8% and the Zacks Internet Software industry’s appreciation of 12.5%.The outperformance can be attributed to GTLB’s expanding clientele and solid adoption of its AI-powered DevSecOps platform.GTLB outperformed its competitor in the DevOps industry, including Microsoft (MSFT) , which is also making strong efforts through its acquisition of GitHub and continued advancement ...

In this articleGTLBPavlo Gonchar | Lightrocket | Getty ImagesAmid concerns over elevated valuations in the U.S. stock market, there are several stocks that continue to look attractive based on the future growth potential they promise.To pick such stocks, investors can track the recommendations of Wall Street experts, who perform in-depth analysis to offer useful insights about a company's strengths and growth opportunities.Here are three stocks favored by the Street's top pros, according to TipRanks, a plat ...

Investors might want to bet on GitLab Inc. (GTLB) , as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors often fi ...

Shares of GitLab Inc. (GTLB) have gained 2.7% over the past four weeks to close the last trading session at $61.58, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $78.46 indicates a potential upside of 27.4%.The average comprises 24 short-term price targets ranging from a low of $61 to a high of $90, with a standard deviation of $7.81. While the lowest estimate indicates a decl ...

In Brief GitLab, the popular developer and security platform, has named a new CEO, Bill Staples, effective immediately. Staples, who’s also been appointed to the company’s board of directors, succeeds CEO Sid Sijbrandij, who’s battling a rare form of cancer. Sijbrandij will transition to executive chair of the board. “I believe [Bill’s] passion for software, commitment to customers, and strong track record make him the right person to lead the company going forward,” Sijbrandij said in a statement. “This i ...

Financial Data and Key Metrics - Q3 revenue increased 31% YoY to $196 million [14] - Non-GAAP operating margin reached 13.2%, an increase of over 1,000 basis points YoY [14] - Total RPO grew 48% YoY to $811.8 million, while CRPO grew 39% YoY to $515.2 million [38] - Non-GAAP gross margin was 91% for the quarter [38] - SaaS revenue grew 44% YoY and now represents 29% of total revenue [39] - Adjusted free cash flow was $9.7 million compared to negative $6.7 million in the prior year period [40] Business Line Data and Key Metrics - GitLab Ultimate now accounts for 48% of total ARR [26] - GitLab Duo Pro and Enterprise are driving productivity improvements, with some customers saving up to 2 hours per week and seeing productivity gains of up to 50% [16][20] - GitLab Dedicated is driving demand for Ultimate, with customers achieving quicker time to value and maintaining high security and compliance standards [32] Market Data and Key Metrics - The company has 9,519 customers with ARR of at least $5,000, contributing over 95% of total ARR [37] - The $100,000+ ARR customer cohort increased 31% this quarter, reaching 1,144 customers [37] - Dollar-based net retention rate (DBNRR) was 124% in Q3, driven by seat expansion, increased customer yield, and tier upgrades [38] Company Strategy and Industry Competition - The company is focused on AI integration throughout the software development lifecycle, with GitLab Duo Pro and Enterprise leading the way [16][25] - GitLab aims to be the vendor of choice for a comprehensive approach to AI, leveraging its end-to-end DevSecOps platform and self-hosted models for security [22][25] - The company is seeing strong momentum in the public sector, with a record quarter and in-process designation for FedRAMP moderate [34] Management Commentary on Operating Environment and Future Outlook - Management believes the software transformation is still in its early stages, with AI expected to further accelerate this trend [10] - The company is well-positioned to lead in the agentic AI space, with a focus on autonomous and proactive AI capabilities [25] - Management expects continued growth in the DevSecOps market, with significant opportunities for vendor consolidation [74] Other Important Information - The company announced a bundled offering for GitLab Duo with Amazon Q, integrating AI capabilities for AWS customers using GitLab Ultimate [24] - GitLab Advanced SaaS, powered by technology acquired from Oxide, is now generally available for Ultimate customers, providing more accurate vulnerability detection [31] - The company is working towards deconsolidating its China joint venture, JiHu, with $14 million in forecasted expenses for FY'25 [43] Q&A Session Summary Question: What stood out in Q3 that led to the strong performance? - The quarter was strong across the board, with record performance in the public sector, strong Ultimate adoption, and best-in-class net dollar retention [49][50] Question: How does the company view the future of AI in the DevSecOps space? - Both GitLab Duo Pro and Enterprise will exist in parallel, with agentic AI representing the next evolution in AI, leveraging GitLab's end-to-end platform [54][55] Question: What is the pricing yield for GitLab Duo? - GitLab Duo makes up over 25% of the total net ARR in year one for top deals, with customers seeing significant productivity gains [69] Question: How does the company view the current market for vendor consolidation? - The company believes it is still in the early innings of vendor consolidation, with significant opportunities to replace DIY DevOps solutions [74] Question: How does the company plan to evolve its pricing model for agentic AI? - While the company cannot comment on future pricing, it is considering different models, including consumption-based pricing, as AI agents become more prevalent [98][99] Question: What is driving the adoption of GitLab Ultimate? - Features like integrated security, compliance, and GitLab Duo Enterprise are driving adoption, with customers seeing significant productivity improvements and cost savings [85][86]