Multiple Contraction Hit Atlassian Corp. (TEAM) in Q3

Hardman Johnston Global Advisors, an investment management company, released its “Hardman Johnston Global Equity Strategy” investor letter for the third quarter of 2025. A copy of the letter can be downloaded here. The portfolio underperformed in the quarter due to stock selection. The composite returned 5.02%, net of fees, compared to 7.62% for the MSCI AC World Net Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Hardman Johnston Global Equity Strategy highlighted stocks such as Atlassian Corporation (NASDAQ:TEAM). Atlassian Corporation (NASDAQ:TEAM) is a leading collaboration software provider that enables organizations to connect all teams through a system of work that unlocks productivity at scale. The one-month return of Atlassian Corporation (NASDAQ:TEAM) was -8.84%, and its shares lost 37.43% of their value over the last 52 weeks. On December 24, 2025, Atlassian Corporation (NASDAQ:TEAM) stock closed at $161.12 per share, with a market capitalization of $42.412 billion.

Hardman Johnston Global Equity Strategy stated the following regarding Atlassian Corporation (NASDAQ:TEAM) in its third quarter 2025 investor letter:

“The top sector detractors from relative performance during the quarter were Information Technology and Health Care. Within Information Technology, Atlassian Corporation (NASDAQ:TEAM) underperformed during the quarter due to multiple contraction, despite strong near-term fundamentals. The company exceeded expectations in its FY4Q results and provided a conservative FY25 guide, supporting confidence in its ability to sustain +20% topline growth. The stock faced additional pressure when OpenAI released GPT-5, unveiling an internal SaaS tool for automating enterprise workloads, which triggered a broader negative reaction across the SaaS sector. Valuation derating reflects uncertainty over the role of application software in the era of generative AI, particularly in DevOps where AI-assisted coding shows clear returns. It has been a challenging run for Atlassian’s multiple, but the stock now trades in rare territory for a business that has idiosyncratic drivers like DC-to-Cloud migration and platform cross sell opportunities that can sustainably drive 20% sales growth.”

Atlassian Corporation (NASDAQ:TEAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 64 hedge fund portfolios held Atlassian Corporation (NASDAQ:TEAM) at the end of the second quarter, compared to 82 in the previous quarter. In the first quarter of fiscal 2026, Atlassian Corporation’s (NASDAQ:TEAM) revenue grew 21% year-over-year to $1.4 billion.  While we acknowledge the risk and potential of Atlassian Corporation (NASDAQ:TEAM) 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 Atlassian Corporation (NASDAQ:TEAM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Atlassian Corporation (NASDAQ:TEAM) and shared the list of stocks that could mint millionaires in 2026. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.