In a rapidly evolving tech landscape where cloud computing and generative AI are reshaping industries, GitLab Inc. ( GTLB ) finds itself at the forefront of this transformation.

Growing demand for and increasing complexity of modern cloud and emerging GenAI applications provide Gitlab ( GTLB ) "significant runway for growth," according to Rosenblatt Securities.

The Gitlab ( GTLB ) Analyst: Analyst Blair Abernethy initiated coverage with a Buy rating and price target of $58 on Tuesday.

The Gitlab Thesis: GenAI is likely to "further commoditize parts of software code generation" and other aspects of the Software Development Lifecycle (SDLC), Abernethy said in the initiation note.

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"The commoditization of code generation should eventually drive significantly more code, programs and complex software systems to be created, and that expanding code base will need to be managed in a platform like GitLab ( GTLB )," the analyst wrote.

The company also upsells AI products throughout its offering, he added.

Only around 25% of paid users have GitLab's ( GTLB ) more expensive Ultimate account, which provides "ample upsell opportunity in the 10k+ customer base," Abernethy stated. "Further, several new AI-driven add-on products are just starting to add to ARR," he wrote.

GTLB Price Action: Shares of Gitlab ( GTLB ) rose by 0.78% to close at $42.90 on Tuesday.

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