Investors see GitLab (NASDAQ: GTLB) as “just another code repository.” That’s wrong.
GitLab has quietly become the most comprehensive DevSecOps platform in the market, embedding automation and AI across the entire software development lifecycle.
From writing and testing code to deployment, security, and monitoring, GitLab is positioning itself as the control center of modern enterprise development.
The stock has been hammered in 2025, down over 22% year to date and trading nearly 40% off its highs.
Yet underneath the volatility is a business growing revenue 25–30% annually, improving margins, and adding blue-chip customers at scale.
That disconnect creates a setup worth attention now.
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Strategic Positioning
GitLab operates at the heart of enterprise software production.
Its single platform spans DevOps, security, compliance, and AI-assisted workflows, eliminating the need for companies to stitch together multiple third-party tools.
The flagship GitLab 18 release delivered over 30 major upgrades, including Duo Agent, an AI automation layer capable of running tests, deploying applications, and flagging vulnerabilities autonomously.
This matters because developers spend most of their time on non-coding tasks. By automating the “plumbing,” GitLab directly unlocks productivity.
With over 50 million registered users and more than half of the Fortune 100 on its platform, GitLab has already achieved enterprise validation.
Unlike point-solution competitors, its end-to-end model makes it difficult for customers to churn once embedded.
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Action Plan: First Moves
For investors, GitLab’s position at the intersection of DevOps + AI + security is too important to ignore.
Short-term traders could target accumulation in the $40–44 range, with a stop near $37.
Growth investors should note Ultimate subscriptions now represent 50% of ARR, providing a high-margin lever.
Long-term buyers can view GTLB as a consolidation play on the fragmented software toolchain, with AI adoption offering optional upside.
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Recent Momentum
Despite stock weakness, GitLab is executing. Fiscal Q1 revenue grew 27% year over year, continuing a long streak of 25%+ growth since IPO.
More impressively, GitLab’s non-GAAP operating margin hit 17.7% last quarter, showing that scale economics are finally kicking in.
Contract momentum remains strong. In recent quarters, GitLab added a record number of $100K+ ARR customers (up 29% YoY) and secured enterprise-wide expansions at Barclays, Capgemini, and CACI.
CACI in particular consolidated seven separate point tools into GitLab, cutting costs 90% and speeding up scans 13x.
Internationally, GitLab Dedicated, as its managed SaaS solution, grew ~90% YoY, demonstrating demand among large regulated industries.
These wins prove GitLab isn’t just adding seats, it’s becoming the enterprise standard.
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Growth Outlook
GitLab’s long-term opportunity lies in three converging themes:
Platform consolidation
Gartner estimates only 25% of enterprises are on DevOps platforms today, rising to 75% by 2027.
GitLab’s single-platform economics, with ROI >480% and payback under six months, make it a natural beneficiary.
Security integration
Security is now the #1 reason customers upgrade to Ultimate.
In Q4, all seven of GitLab’s largest deals were Ultimate expansions, highlighting demand for integrated security.
AI adoption
GitLab Duo (Pro, Enterprise, Workflow) is embedding AI beyond code generation.
Workflow, in private beta, can autonomously handle bug fixes and deployments, a leap toward agentic AI.
Consensus estimates call for revenue to grow from $759M in FY25 to ~$1.3B by FY28, with EPS potentially hitting $2.00 by then.
If the stock earns even a modest 50x forward multiple, shares could approach $100 in 2–3 years, nearly double current levels.
Action Plan: Growth & Income
GitLab doesn’t pay a dividend, but its investment case is all about compounding top-line growth and operating leverage.
Platform consolidation tailwind: Every customer that expands into Ultimate drives margin expansion.
AI monetization: As Duo Workflow hits general availability, GitLab could pivot from seat-based pricing toward consumption-based billing, creating a major new revenue driver.
Valuation re-rating: At ~7x forward sales, GTLB trades at a discount to high-growth SaaS peers. A re-rating back toward 10x could add 40–50% upside alone.
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Risks: What Could Go Wrong
Investors should weigh several key risks before stepping in:
1. Macro headwinds
Enterprise software budgets remain under pressure.
Prolonged IT spending slowdowns could delay seat expansions and new logo growth.
2. Competitive landscape
Microsoft’s GitHub Copilot dominates AI-assisted coding, and Atlassian is expanding its DevOps stack.
Large rivals with deep ecosystems could pressure GitLab’s growth trajectory.
3. Dependence on upgrades
Ultimate drives margins, but if customers hesitate to upgrade from Premium, growth could stall.
Heavy reliance on security features means slower security spending would directly hit ARR.
4. Valuation risk
Even at discounted multiples, GTLB trades on premium earnings assumptions.
Any earnings miss could trigger volatility.
5. Execution on AI
Duo Workflow remains in beta. If adoption lags or fails to differentiate, investors may question GitLab’s AI moat.
6. Profitability durability
Operating margin gains are new. Maintaining 15%+ margins while growing 25% annually is a balancing act not yet proven at scale.
Action Plan: Technical Setup
From a chart perspective, GitLab has support near $38–40, aligning with 52-week lows.
A sustained breakout above $48 could open a path toward $55–60. Traders can use this range to size entries and stops.
Final Take
GitLab is becoming the operating system for modern software development.
With deep security integration, enterprise adoption, and AI workflows on the horizon, the company is positioned to capture a disproportionate share of the DevSecOps market.
The stock’s steep sell-off in 2025 looks more like sentiment-driven punishment than fundamental deterioration.
For contrarian investors willing to ride out volatility, GitLab offers growth, operating leverage, and AI optionality, all at a discount to its potential.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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