Blog

May 16, 2023

GitLab soars on plan for new AI

[1/2] GitLab Inc logo and words 'Artificial Intelligence' are seen in this

[1/2] GitLab Inc logo and words 'Artificial Intelligence' are seen in this illustration taken June 6, 2023. REUTERS/Dado Ruvic/Illustration

NEW YORK, June 6 (Reuters) - Shares of GitLab Inc (GTLB.O) jumped more than 35% on Tuesday after the software development platform announced plans to launch a revenue-boosting artificial intelligence (AI)-powered product.

GitLab, widely used by software developers for coding work, will add a "ModelOps" feature to its main "DevSecOps" platform with new capabilities including code writing suggestions. The product is expected to be launched this year at $9 per month, GitLab said late Monday.

"The product ... has the potential to be a healthy growth driver in FY25," Bank of America analysts led by Koji Ikeda said in an investor note.

GitLab's stock rose as much as 35.4%, its biggest one-day percentage jump since the company went public in 2021. It was up 31.8% at $46.66 at mid-afternoon.

GitLab said on Monday its first-quarter revenue jumped 45% to $126.9 million, beating the Refinitiv consensus estimate and the company's earlier forecasts. Multiple analysts raised their price targets for GitLab's stock on the news.

Eighteen analysts on average recommended buying GitLab shares, and set a median price target of $53.50, according to Refinitiv.

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Chibuike reports on mostly large U.S.-based private equity firms, including Blackstone, KKR, Carlyle, and Apollo. He previously worked at Bloomberg News, and holds master's degrees in journalism from New York University and Edinburgh Napier University. Contact: 332-999-6154