Atlassian flips the script on the SaaSpocalypse — but will it last?
The Australian software giant’s earnings beat was driven by a pull forward in data centre revenue and strong cloud demand, but analysts and investors see strong AI signals.
After being hammered under the threat of AI replacement, Atlassian’s stock finally sprung back to life on Friday (Australian time) after its quarterly results challenged the SaaSpocalypse narrative that has enveloped the company for months.
Elm Responsible Investments portfolio manager Jai Mirchandani told Capital Brief “just to be clear, based on today’s result it looks like Atlassian is looking like a beneficiary of AI”, but the company will need to continue to deliver before he thinks of investing.
Investors have been concerned that the proliferation and productivity gains from AI tools, which has claimed the jobs of thousands of tech workers already, would also lead to a reduction in the number of per person subscriptions made out to SaaS providers like Atlassian.
UBS analyst Karl Keirstead in March warned that “that the AI and maturation risks were not yet fully baked into Atlassian shares, any AI disruption risk is too early-stage to have played out”.
