Top 10 Stocks to Buy According to SRS Investment Management

8. Atlassian Corporation (NASDAQ:TEAM)

Number of Hedge Fund Holders as of Q4: 75

SRS Investment Management’s Equity Stake: $317.76 Million 

Atlassian Corporation (NASDAQ:TEAM), an Australian software company specializing in collaboration tools for software development and project management, continues to strengthen its position in the enterprise software market. In its second-quarter fiscal year 2025 earnings report, the company highlighted the growing demand for its platform, particularly among enterprises seeking enhanced collaboration solutions. CEO Mike Cannon-Brookes emphasized Atlassian’s commitment to integrating AI throughout its cloud platform, positioning it as a key driver of innovation and efficiency. CFO Joe Binz credited strong enterprise sales execution for exceeding revenue expectations, with subscription revenue growing 30% year-over-year, reinforcing confidence in the company’s strategic focus on AI, enterprise expansion, and its “System of Work” framework.

Financially, Atlassian Corporation (NASDAQ:TEAM) reported a total revenue of $1.29 billion for Q2 FY2025, marking a 21% increase from the same period in FY2024. Despite this growth, the company posted an operating loss of $57.5 million, slightly widening from the $49.1 million loss recorded a year earlier. However, net loss improved significantly, narrowing to $38.2 million from $84.5 million in the previous year, reflecting better cost management and efficiency gains. Net loss per diluted share stood at $0.15, an improvement from $0.33 in the Q2 fiscal year 2024. Additionally, the company maintained a strong balance sheet, with cash, cash equivalents, and marketable securities totaling $2.5 billion, ensuring financial flexibility for continued investments.

Looking ahead, Atlassian Corporation (NASDAQ:TEAM) projects continued revenue growth in the third quarter of FY2025, with expected total revenue between $1.34 billion and $1.35 billion. Cloud revenue is forecasted to grow by approximately 23.5% year-over-year, while Data Center revenue is expected to increase by 7.0%. Marketplace and other revenue segments are anticipated to remain flat. The company also expects a gross margin of approximately 82%, indicating strong profitability at the operational level. The operating margin is projected at -3.0%, reflecting Atlassian’s ongoing efforts to balance investment in growth with financial discipline. The company’s focus on enterprise adoption, AI integration, and scalable collaboration tools positions it well for sustained long-term growth, making it eighth in the list of top stocks to buy according to SRS Investment Management.