Shares of GitLab Inc. (NASDAQ: GTLB) plummet nearly 13.5% post fiscal year 2026 third-quarter earnings report, despite solid results with 25% revenue growth and strong core metrics. Microsoft Corporation (NASDAQ: MSFT) scaling back AI offerings may be affecting the market negatively, leading to investor hesitancy in GitLab’s stock movement.

Gitlab’s Q3 results show strength in revenue growth, cRPO, and RPO growth, but concerns over AI monetization persist. Revenue guidance for fiscal year 2026 falls short of analyst expectations for AI premium, exacerbated by Microsoft’s AI sales target miss, suggesting companies are still in POC mode with AI adoption.

Analysts express caution with GitLab, lowering price targets amid AI-related uncertainty and skepticism about accelerated growth. GitLab’s stock breaks down from long trading range, turning resistance at $40s. The downtrend is confirmed by momentum indicators, with counter-trend bounces expected until a durable uptrend is established.

Read more at Nasdaq: Strong Quarter, Weak Reaction: Why GitLab Shares Dropped