Coding a Comeback With This DevSecOps Contender

Author

Noah Zelvis
August 30, 2025

GitLab (NASDAQ: GTLB) is one of the most important behind-the-scenes players in modern software development has lost more than 13 percent year to date.

Yet revenue is still growing above 20 percent, margins are expanding, and AI features are gaining traction.

The dip could be a rare chance to buy an emerging DevSecOps leader before its next run.

Volatility Made Simple (Sponsored)

The market’s wild swings—like a 427‑point drop one day and a 619‑point rally the next—are enough to make anyone’s head spin.

With Washington trade talks and Fed policy chatter fueling volatility, you need a proven playbook.

Grab our FREE e‑book, Mastering Options Trading: A Beginner’s Guide, and discover:

  • Market‑proof strategies for up, down, or sideways moves

  • Easy income tactics that work in any climate

  • Smart discount buys to snag top stocks at lower prices

  • Advanced setups favored by pros for rapid growth

  • Dividend‑option combos that lock in extra premium

Never Miss Our Top Tech Recommendations Again!

We now send our tech picks via text, too, so you’ll get the same tech breakout news without having to open your inbox.

Strategic Positioning: The DevSecOps Operating System

GitLab has built one of the most comprehensive DevSecOps platforms on the market, unifying source code management, continuous integration, security, and deployment into one end-to-end workflow.

Its value proposition is simple: reduce tool sprawl, boost developer productivity, and help enterprises build and secure software more efficiently.

A major differentiator is GitLab Duo, the company’s AI suite.

With Duo Pro and Duo Enterprise, developers get intelligent code suggestions, automated testing, and security insights embedded directly in their workflows.

GitLab is betting that AI will become a standard feature across development platforms, and it is moving aggressively to make its solution the most complete in the category.

Enterprise adoption is accelerating. GitLab Ultimate, its top-tier plan, now represents 50 percent of annual recurring revenue.

Customers spending more than $100,000 annually grew 26 percent in Q1, underscoring traction among larger enterprises.

Action: Investors can consider accumulating shares between $46 and $50, taking advantage of the pullback while watching for AI adoption metrics in the upcoming earnings call.

Explosive Five (Sponsored)

The market rewards those who act early.

That’s why our team has just released an all-new report—5 Stocks Set to Double.

These picks were chosen because they stand out with:

In the past, this exact type of report has uncovered stocks that posted triple-digit runs of +175%, +498%, even +673%.¹

The new report is free—but only until midnight tonight.

[Download your free copy here before time runs out]

Don’t just settle for growth. Aim for massive.

Poll: If you could tax one thing to fund retirement, which would it be?

Login or Subscribe to participate in polls.

Momentum Drivers: Growth Holds Despite Volatility

GitLab’s fiscal Q1 revenue rose 27 percent year over year to $226 million, modestly beating consensus estimates.

While some analysts flagged it as the smallest revenue beat in company history, the underlying growth remains solid.

Net retention of 122 percent highlights GitLab’s ability to expand spend from existing customers, a sign of sticky demand.

More importantly, profitability is moving in the right direction.

Non-GAAP operating margin expanded 14 points in Q1, leading to adjusted EPS of $0.17, which came in well ahead of expectations.

Management also raised full-year operating income and EPS guidance, pointing to sustained margin improvement.

For fiscal 2026, GitLab expects revenue between $936 million and $942 million, up roughly 24 percent year over year.

Earnings are forecast in the $0.70–$0.75 range. Analysts have inched estimates higher over the past month, with ten upward revisions, reflecting confidence in GitLab’s ability to deliver.

Momentum Surge (Sponsored)

Looking for short-term upside?

A new report just dropped featuring 7 high-momentum stocks, all selected using a mathematical prediction system that’s outperformed the S&P 500 since 1988.

These picks come from Zacks Rank #1 Strong Buys—fewer than 5% of stocks make the cut.

Access the report now, completely free, before the market catches up.

AI and Partnerships: The Next Growth Frontier

AI is at the center of GitLab’s strategy.

The launch of GitLab 18 brought AI-native features like Code Suggestions, Chat, and security dashboards directly into developer environments.

Unlike standalone AI code generators, GitLab integrates these features across the entire development lifecycle, positioning itself as the productivity layer for software teams.

Partnerships with Amazon AWS and Google Cloud are expanding distribution.

GitLab Duo is now integrated with Amazon Q, AWS’s agentic AI platform, helping enterprises modernize legacy code and streamline workflows.

With Google Cloud, GitLab has deepened integrations for authentication, deployment, and security.

These relationships not only expand reach but also reinforce GitLab’s role in the cloud ecosystem.

Valuation: Premium Priced but Near Support

At $49, GitLab trades at a lofty 681 times trailing earnings and roughly 7.6 times forward sales, compared to an industry average closer to 6.5.

The valuation is stretched, which is why the stock often sells off on even modest guidance misses.

Yet the long-term fundamentals may justify the premium. GitLab has no net debt, more cash than total liabilities, and a fortress balance sheet that allows for self-funded growth.

With free cash flow margins improving and revenue growth projected above 20 percent annually, management has room to reinvest in AI and expand globally.

Action: Use the current weakness near $50 as an entry point for long-term exposure. Consider scaling in, as volatility may test support near $46.

Technicals: Sitting Near a Floor

The stock is consolidating near $49 after a 13 percent year-to-date decline. Its 52-week low sits at $37.90, while resistance remains heavy around $60.

The 200-day moving average near $55 will be a critical test for momentum.

With RSI readings trending toward oversold levels, the setup suggests a potential rebound if earnings or AI updates surprise positively.

However, volume remains muted, and the stock has underperformed peers like Oddity Tech, which has surged over 70 percent this year.

Institutional and Analyst Sentiment

Wall Street is cautiously optimistic. BofA Securities reaffirmed a Buy rating with a $72 target after meeting with management, citing confidence in GitLab’s Duo AI strategy.

Canaccord, Macquarie, and William Blair also maintain Buy or Outperform ratings, with price targets ranging from $72 to $76.

At the same time, some firms have trimmed targets. UBS lowered its view to $73 from $85, noting modest revenue beats.

DA Davidson remains Neutral with a $45 target, reflecting concerns about competition and costs tied to GitLab’s JiHu joint venture in China.

Overall, analysts see about 25–30 percent upside from current levels, but sentiment is divided.

Institutional flows reflect this split as well, with some large funds adding positions while others reduce exposure.

Risks to Watch

  • Valuation pressure remains the primary risk, as modest revenue misses can trigger sharp pullbacks.

  • Competition from Microsoft GitHub and Azure DevOps is intensifying. GitHub Copilot is widely adopted and could pressure GitLab’s AI positioning.

  • Macro headwinds could dampen enterprise software budgets, delaying seat expansions.

  • JiHu joint venture costs continue to weigh on margins, with no clear timeline for deconsolidation.

  • Volatility risk is high, as shares can swing sharply around earnings events.

Final Word: A High-Beta Play on DevSecOps and AI

GitLab’s stock has been punished this year, but the underlying business continues to grow at a healthy clip.

Its integrated DevSecOps platform, expanding enterprise base, and rapid rollout of AI features create a strong long-term story.

The balance sheet is clean, and margin expansion is trending in the right direction.

The stock is not cheap, and competition is fierce, but for investors seeking exposure to AI-driven productivity tools in enterprise software, GitLab may be one of the best ways to play the trend.

The current pullback provides a window to enter at more reasonable levels than those seen earlier this year.

Action Recap

✅ Consider starting a position between $46–$50 while monitoring Q2 earnings on September 10
✅ Watch for AI adoption updates, especially around GitLab Duo and the Agent Platform
✅ Use $46 as near-term support and $60 as the first resistance level
✅ Scale in gradually to manage volatility, with $38 as a potential long-term floor
✅ Track JiHu joint venture updates and enterprise seat expansion as key drivers of margins and growth

That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.

Best Regards,
—Noah Zelvis
Tech Stock Insider