Wall Street Predicts GitLab Stock Will Soar 110%. Here’s Why.

GitLab (GTLB) has been one of the market's quieter AI winners. With a strong start to fiscal 2027 and an ambitious roadmap centered on AI-powered software development, Wall Street now expects huge upside by 2027. While Gitlab shares are down 17% year-to-date, analysts predict the stock to climb to $65, an upside of 110% from current levels.

Let’s find out why.

AI Is Creating a Massive New Growth Engine

GitLab is an AI-powered software development platform that helps companies plan, write, test, secure, and deploy software in one place. It is commonly referred to as a DevSecOps platform, which means that it combines development, security, and operations.

In the first quarter of fiscal 2027, revenue surged 23% year-over-year to $264 million. Enterprise demand remained particularly strong, with 1,519 customers generating more than $100,000 annually, up 18% YOY. These larger customers now account for more than 75% of total ARR (annual recurring revenue). Net retention rate stood at 117%, while total remaining performance obligations (or RPO) reached $1.1 billion, growing 18% YOY. Current RPO, which the company expects to recognize within the next 12 months, stood at $724 million. Adjusted earnings rose 6% to $0.23 per share.

The rapid adoption of its AI offerings is what is fueling the company’s growth. Management revealed that its newly launched GitLab Duo Agent Platform (DAP) earned more net new ARR in Q1 than the Duo Pro and Duo Enterprise together did in any previous quarter. The new platform was also attached to four of GitLab's top 10 deals during the quarter. The company is now planning to consolidate Duo Pro and Duo Enterprise into DAP in fiscal 2027, creating a unified AI platform built around agentic software development.

Five Strategic Bets Could Expand GitLab's Addressable Market

During the first-quarter earnings call, management outlined five major initiatives aimed at driving future growth. They are:

1. GitLab is upgrading its technology infrastructure so it can handle the much larger workloads created by AI-powered software development.
2. The company is building tools that help humans and AI agents work together more efficiently throughout the software creation process.
3. GitLab is developing a new platform called Orbit that gives AI systems access to company knowledge and project information, helping them produce better results.
4. The company is strengthening security, compliance, and oversight features to help enterprises manage AI safely.
5. GitLab wants to become the one-stop platform for all forms of software development, whether code is written by humans, assisted by AI, or created autonomously by AI agents.

Another reason probably why analysts remain optimistic about GitLab's long-term prospects is its strong financial position. It generated $147 million in adjusted free cash flow and ended Q1 with $1.36 billion in cash and investments. This financial position gives the company flexibility to invest aggressively in future growth opportunities. At the same time, Gitlab is also cutting costs with workforce restructuring that includes cutting 14% of staff while reducing its geographic footprint by about 37% and eliminating up to three management layers.

Management expects restructuring charges of $30 million to $35 million. But it expects this strategy will result in significant savings that will be used in AI initiatives, architectural development, and employee investments. Management raised the full fiscal year guidance and now expects fiscal 2027 revenue between $1.112 billion and $1.118 billion, which would potentially be 16% to 17% growth year-over-year. 

Why Wall Street Sees Triple-Digit Upside

Gitlab’s core DevSecOps business continues to grow at a healthy pace, enterprise adoption remains strong, and the company's AI products are gaining traction faster than expected. This is probably why Wall Street expects significant upside. Its average target price of $35 implies GTLB stock can climb by 13% from current levels. But its high price estimate of $65 suggests the stock has an upside potential of 110% over the next 12 months. 

While Wall Street expects significant upside, the consensus rating for Gitlab stock has dropped from a “Moderate Buy” a few months back to an overall “Hold.”

Of the 28 analysts covering the stock, seven rate it a “Strong Buy,” one says it is a “Moderate Buy,” 18 rate it a “"Hold,"and two say it is a “Strong Sell.”