We came across a bullish thesis on GitLab Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on GTLB. GitLab Inc.’s share was trading at $26.70 as of March 3rd. GTLB’s trailing and forward P/E were 485.56 and 23.58 respectively according to Yahoo Finance.
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GitLab Inc., together with its subsidiaries, develops software for the software development lifecycle in the United States and internationally. GTLB has been labeled an “AI loser” amid fears that autonomous AI agents will reduce the need for human developers and compress demand for DevSecOps seats. The market has pushed the stock toward 52-week lows on this narrative, but the core thesis behind the decline appears fundamentally flawed.
Rather than shrinking the opportunity set, the proliferation of AI-generated code is likely to increase complexity, compliance requirements, and security risks—dynamics that strengthen the need for an integrated DevSecOps platform. GitLab’s all-in-one model differentiates it from competitors such as GitHub by offering a unified lifecycle solution instead of a stitched-together ecosystem.
Its Duo AI suite is embedded across planning, coding, security scanning, and monitoring, positioning the platform as AI-native rather than AI-disrupted. With 54% of revenue now coming from its higher-margin Ultimate tier, security and compliance capabilities are increasingly central to enterprise adoption.
The company has also turned a corner on profitability, delivering an 18% non-GAAP operating margin in its most recent quarter while sustaining roughly 25% revenue growth. As GitLab scales toward $1 billion in revenue, operating leverage from its single-platform architecture could become more visible.
Trading near all-time low forward price-to-sales multiples, the stock reflects skepticism that contrasts with improving fundamentals. The bullish strategy centers on a September 2026 $60/$75 call spread, offering defined downside with asymmetric upside should the market re-rate GitLab as AI accelerates—not replaces—enterprise software development.
Previously, we covered a bullish thesis on GitLab Inc. (GTLB) by Compounding Your Wealth in April 2025, which highlighted the company’s strong revenue growth, enterprise expansion, rising Ultimate tier contribution, and improving profitability. GTLB’s stock price has depreciated by approximately 43.19% since our coverage due to IT sector weakness and conservative guidance, with sell-offs following earnings that beat estimates but pointed to slowing growth. OppCost shares a similar view but emphasizes on the AI mispricing narrative and asymmetric upside through a 2026 call spread strategy.
GitLab Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held GTLB at the end of the fourth quarter which was 51 in the previous quarter. While we acknowledge the risk and 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 time frame. If you are looking for an AI stock that is more promising than GTLB and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
