We recently published a list of the 12 Best Up and Coming Stocks to Buy According to Wall Street Analysts. In this article, we are going to take a look at where Gitlab Inc. (NASDAQ:GTLB) stands against other up and coming stocks to buy according to Wall Street Analysts.
Tom Lee, Fundstrat managing partner, joined CNBC’s ‘Closing Bell’ on March 22 to discuss the current market sentiment. When asked about the recent report on tariffs, which oscillates between an iron fist and an olive branch, Lee expressed optimism. He suggested that markets should interpret the situation positively because many clients view tariffs as punitive and potentially recession-inducing. However, a mutually agreed or reciprocal tariff deal could create a favorable scenario for businesses, potentially setting the stage for a significant recovery rally. Addressing the immediate challenge of volatility leading up to April 2, Lee acknowledged the dilemma investors face during this period of uncertainty. He noted that many are overwhelmed by market fluctuations and tempted to give up. Drawing a parallel to the Cuban Missile Crisis in 1962, which lasted 12 days, Lee pointed out that markets historically bottom before crises are resolved. For instance, during that crisis, the stock market reached its lowest point seven days in and recovered two-thirds of its losses before the resolution. He suggested this historical pattern could serve as a template for today’s market behavior.
When asked about the economy, Lee remarked on how quickly sentiment has deteriorated. He attributed part of this decline to divisive political leadership that affected consumer confidence and noted that CEO confidence has also dropped unexpectedly. CEOs have become hesitant to make decisions, which is contributing to what he described as a growth shock. However, he remained hopeful that this slowdown would be temporary if it does not persist for months. The conversation shifted to concerns about a potential recession, with Jeffrey Gundlach recently estimating a 50% to 60% chance of one occurring in the next few quarters. Lee countered this by stating that while a 10% drawdown in the S&P 500 already prices in a 40% chance of recession, markets do not fully align with Gundlach’s pessimistic view. He highlighted that economies like China, Europe, Canada, and Mexico have been outperforming the US since February 18. If punitive tariffs were truly driving global recessions, these economies would also be struggling. Instead, Lee described markets as more paralyzed than outright pessimistic.
Our Methodology
We used the Finviz stock screener to compile an initial list of the top stocks that went public in the last 5 years. We then selected the 12 stocks with high analysts’ upside potential as of March 21 that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of software engineers working together in an open office, developing innovative solutions.
Gitlab Inc. (NASDAQ:GTLB)
Average Upside Potential as of March 21: 56.37%
Number of Hedge Fund Holders: 51
Gitlab Inc. (NASDAQ:GTLB) develops software for the software development lifecycle. It offers the GitLab DevOps platform which streamlines planning, building, securing, and deploying software. This enables faster development cycles and enhanced visibility. It provides essential tools and services for organizations that want to improve their software development processes.
On March 4, BTIG reiterated a Buy rating and an $86 price target for the company due to its Q4 2024 results, where revenue grew 29.1% year-over-year to $211.4 million. This bullish stance is supported by the company’s robust 2026 guidance, increasing big deal activity, the strength of its Ultimate tier, and the growing adoption of new products like GitLab Dedicated and Duo Enterprise, which utilizes AI.
The company’s AI-driven segment is centered on GitLab Duo. It’s embedding AI throughout its DevSecOps platform. A DevSecOps platform integrates development, security, and operations into a unified toolset. It streamlines software delivery while ensuring security throughout the process. In Q4 2024, the company saw strong adoption of Duo Enterprise, with major clients like Barclays and Capgemini investing in its AI capabilities. Gitlab Inc. (NASDAQ:GTLB) is advancing its AI offerings with Duo Workflow, which entered private beta this month, with a public beta planned for summer.
The company’s comprehensive software development platform, strong user base, and potential for growth in a large market prompted the Artisan Mid Cap Fund to increase its position in the company. The Fund stated the following regarding Gitlab Inc. (NASDAQ:GTLB) in its Q4 2024 investor letter:
“Along with Monolithic Power Systems, notable adds in the quarter included Onto Innovation and GitLab Inc. (NASDAQ:GTLB). Gitlab offers a one-stop shop for software development projects. The company provides developers with tools to manage code, collaborate with teammates and track the entire development workflow. It has a strong brand with more than 30million registered users across its free and paid subscription tiers. Customers adopt Gitlab to deploy code faster, more consistently and more securely. We believe the company is early in its lifecycle given the large addressable market of global software developers and a general trend toward companies looking to digitize aspects of their business and deploy code quickly. Recent earnings results were thesis affirming, and we added to the position.”
Overall, GTLB ranks 9th on our list of the best up and coming stocks to buy according to Wall Street Analysts. While we acknowledge the growth potential of GTLB, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GTLB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.