GitLab Inc. (GTLB): A Bull Case Theory

We came across a bullish thesis on GitLab Inc. on Valueinvestorsclub.com by InThePocket. In this article, we will summarize the bulls’ thesis on GTLB. GitLab Inc.'s share was trading at $41.15 as of December 1st. GTLB’s trailing and forward P/E were 485.56 and 40.32 respectively according to Yahoo Finance.

GitLab (GTLB) stands out as an attractive investment among software companies sold off this year due to “AI fears,” as the company is positioned to benefit directly from AI-driven development. GitLab is an all-in-one DevSecOps platform enabling enterprises to plan, build, secure, and deploy software at scale.

As AI-generated code increases development volume, the platform’s capabilities—particularly governance, security, and deployment—become increasingly critical. With a net cash balance sheet and trading at ~7x EV/ARR, GitLab offers a valuation discount to high-quality peers despite strong execution, with revenue more than tripling since its IPO.

The company has leveraged a land-and-expand strategy, maintaining net revenue retention above 120% and now driving upsell opportunities through its AI agent, Duo, embedded across the DevSecOps lifecycle. Duo improves developer productivity, enhances security, and reinforces GitLab’s premium tiers.

Management expects ~25% growth in ARR this fiscal year and sees a $40 billion addressable market expanding as enterprises increasingly adopt integrated DevOps platforms. GitLab serves large, regulated enterprises that require robust security, governance, and oversight, distinguishing it from peers like GitHub and Bitbucket, which target open-source and smaller teams.

GitLab’s moat lies in its deeply integrated, enterprise-grade security and compliance capabilities, which are difficult to replicate. AI adoption amplifies rather than diminishes GitLab’s relevance, as increased code output heightens the need for its platform. With gross margins near 90%, a capital-light model, and operating leverage from scale, GitLab is positioned to achieve EPS and free cash flow profitability within 12–24 months.

Leadership transition, stock-based compensation, and potential acquisition speculation are noted risks. Overall, GitLab represents a high-quality, sticky SaaS business with strong growth, expanding AI integration, and significant upside potential.

Previously we covered a bullish thesis on GitLab Inc. (GTLB) by Compounding Your Wealth in April 2025, which highlighted strong enterprise expansion, AI-driven Duo adoption, and record Q4 bookings. The stock has depreciated approximately 12.44% since our coverage. The thesis still stands as GitLab remains well-positioned for AI-driven growth. InThePocket shares a similar perspective but emphasizes valuation and ARR growth.

GitLab Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held GTLB at the end of the second quarter which was 52 in the previous quarter. While we acknowledge the potential of GTLB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.