GitLab shares surged 34.9% in August 2026 as Wall Street walked back fears that AI agents would make its DevSecOps platform obsolete. Multiple analysts raised their price targets during the month, and the company's fiscal second-quarter results, released in early September, beat consensus estimates on revenue and earnings.
GitLab stock gained 34.9% in August, according to data from S&P Global Market Intelligence — roughly 90 times the S&P 500's 2.6% gain over the same period. The rebound followed a rough stretch: GitLab had lost 48% of its value between early January and early April as investors worried that AI agents would replace traditional enterprise software.
Wall Street reverses its AI-fear thesis
That sell-off carried a label: the "SaaSpocalypse." The theory held that AI agents would take over tasks handled by enterprise software, making platforms like GitLab's obsolete. But investors have since concluded the picture is more nuanced — AI agents can automate certain tasks, but are unlikely to fully replace software deeply embedded in existing business systems. GitLab's DevSecOps platform, which secures the software-creation process, may even benefit as more developers use AI agents to build code.
Analysts raise price targets
That shift in sentiment showed up directly in analyst models during August. BTIG's Nick Altman kept a buy rating and raised his price target to $52 from $36, arguing the AI trend is a tailwind rather than a threat for GitLab. RBC Capital's Matthew Hedberg held a hold rating while lifting his target to $46 from $29, citing results from other software providers. BofA's Koji Ikeda raised his target to $45 from $38 while keeping a neutral rating, the second such increase from BofA in August.
Earnings confirm the rebound
As September opened, GitLab reported fiscal 2027 second-quarter results for the period ended July 31. Revenue of $286.3 million rose 21% year over year, beating the consensus estimate of $273.1 million. Adjusted earnings per share of $0.25 came in ahead of the $0.18 analysts expected, while adjusted operating margin ticked up to 15% from 14% in the prior quarter.
Remaining performance obligation, contracted revenue not yet recognized, climbed 16% to $1.2 billion, and the portion due within 12 months jumped 20% to $744.7 million. The rebound has pushed GitLab's valuation to 57 times forward earnings and 48 times next year's expected earnings.
Source: The Motley Fool
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