Atlassian Corporation (NASDAQ:TEAM) is one of the AI Stocks Analysts Say You Should Watch Closely. On September 11, Guggenheim analyst Howard Ma initiated coverage on the stock with a Buy rating and a price target of $225.00.
According to the firm, investor sentiment on the shares has been “depressed” due to concerns that AI coding tools is going to impact Atlassian’s seat-based model negatively.
Nevertheless, the analysts told investors in a research note that even though there are indications that AI may impair entry level job growth, it isn’t the “death knell for Atlassian.” The firm further noted that global developer headcount continues to rise and while AI improves productivity, user growth should continue.
“Key Message: We’re initiating coverage of TEAM shares with a Buy rating and $225 price target, representing 30% potential upside. Atlassian has been a paradigm for product-led growth that has led to consistent Rule of 50 status. Underpinning this rarefied air are 300,000+ customers of its collaboration products like Jira and Confluence, while expansion into service management, AI workflows via Rovo, and upmarket investments are bearing fruit for its wall to-wall “System of Work” strategy. Recently, investor sentiment has been depressed, due to concerns that AI coding tools will hurt Atlassian’s seat-based model, which is split evenly between technical and non-technical users.”
“Despite indications that AI may impair entry level job growth, especially roles like software developers, we don’t view this as the death knell for Atlassian. Global developer headcount continues to rise, and while AI improves productivity, user growth should continue. Moreover, AI-driven app development should increase usage of Atlassian’s products, supported by positive web and mobile app traffic trends. Could AI cause seat compression over time? Possibly, but even if so, we calculate Atlassian has penetrated at most 20% of its global addressable opportunity today and max one-third by 2029, leaving ample room to achieve its LT…
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