Macquarie Analyst Reiterates ‘Outperform’ Rating on GitLab Inc. (GTLB) with $90 Price Target, Highlights AI-Driven Growth and Strategic AWS Partnership
We recently compiled a list of the 10 Trending AI Stocks on Latest News and Ratings.In this article, we are going to take a look at where GitLab Inc. (NASDAQ:GTLB) stands against the other AI stocks.
Technology is advancing unprecedentedly, and physical AI seems to be the next leap forward. That’s right, physical AI is going to be an incremental moment for mankind, where intelligent machines will have the ability to interact and manipulate their environment. Manifesting in robots and machines, these advanced systems can analyze their surroundings, use data to make decisions, and even physically interact with the world around them.
This makes robotics makers, auto suppliers, and specialty semiconductor companies the next big winners in AI. While it initially started with search bots, technology is now moving to agentic AI, such as research assistants and customer service representatives. Naturally, the next focus is going to be technology that can interact with the physical world and act independently through artificial intelligence. According to analysts, this is where all the “big money” is going to be.
“As you go into 2025, agentic AI is that next inflection point here before you hit that physical AI moment ... like with everything else in the world, you have to crawl before you can walk and then run. Gen AI hasn’t really seen much monetization thus far. So when you start thinking about agentic AI and robotics and what have you, there’s a real kind of belief out there — and expectation. You’ll see those use cases start to come about this year”.
According to CNBC, Wall Street anticipates realistic AI-enabled agent applications to start appearing this year. Innovations in physical AI could begin coming out later, most likely beginning with self-driving cars.
Physical AI has created “an additional leg to the stool” to the AI build-out phase. “There’s an additional driver now that augments what’s going on today and AI broadly”.
According to CEO Jensen Huang, “the ChatGPT moment for general robotics is just around the corner”. He said that the company anticipates enabling the development of three key robots in the coming years: agentic agents, self-driving vehicles, and humanoid robots. In this respect, he has also introduced Nvidia’s Cosmos platform for companies looking to train and develop physical AI systems. According to a recent Nvidia press release, the Cosmos platform can generate physics-based videos from several inputs, like video, image text, as well as robot sensor and motion data.
Here is what Oppenheimer analyst Colin Rusch thinks about Physical AI:
“We see physical AI as a nascent interdisciplinary field poised to transform the industrial complex through increased asset productivity and labor efficiency. We see outsized investment return potential in sensing, sensor fusion, compute hardware & software architecture, connectivity, controls, and AI training strategies”.
All in all, analysts believe AI is going to be a multi-trillion-dollar Total Addressable Market opportunity, particularly on the physical side of things.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of software engineers working together in an open office, developing innovative solutions.
GitLab Inc. (NASDAQ:GTLB) is a comprehensive AI-powered DevSecOps platform that streamlines software development for organizations. On January 15, Macquarie analyst Steve Koenig reiterated an “Outperform” rating on GitLab Inc. (NASDAQ:GTLB) with a price target of $90. Naming it his top software pick for the year, Koenig's optimism stems from multiple factors. For starters, there is the perception of a significant valuation discount that makes the company “a valuable and strategic financial asset”. Moreover, the analyst believes that GitLab should also benefit from the continued enthusiasm for AI. Its Duo offering, which includes a suite of AI-powered tools within the GitLab platform, helps developers with various tasks like code writing and security checks. The company has also partnered with Amazon Web Services back in December. Since 2025 is going to be “the year of agentic AI”, GitLab will benefit from having the partnership. Koenig said that the joint offering takes the company a step ahead, with GitLab’s “agentic AI agenda” going beyond code creation to a range of use cases, such as testing, security reviews, and code modernization.
Overall GTLB ranks 2nd on our list of the AI stocks on latest news and ratings. While we acknowledge the potential of GTLB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.
