Atlassian's Cloud Growth and AI Developments Attract Analyst Attention

Wall Street is reacting positively to Atlassian Corp (NASDAQ: TEAM) as analysts have upgraded their assessments following the company’s strong quarterly performance reported recently.

Analysts Upgrade Atlassian

Analysts from various financial institutions have increased their price targets for Atlassian’s stock, reflecting confidence in the company’s ongoing success.

• JMP Securities analyst Patrick Walravens maintained a Market Perform rating.
• Raymond James analyst Adam Tindle has an Outperform rating and raised the price target from $250 to $330.
• Truist Securities analyst Joel Fishbein reiterated a Buy rating and increased the price target from $300 to $350.
• Keybanc analyst Jason Celino holds an Overweight rating and raised the price target from $315 to $365.
• Cantor Fitzgerald analyst Thomas Blakey maintained a Neutral rating and adjusted the price target from $264 to $304.
• Scotiabank analyst Nick Altmann has a Sector Perform rating and increased the price target from $250 to $330.

Fiscal Second Quarter Results

JMP Securities’ Walravens noted that Atlassian had a strong performance in the fiscal second quarter of 2025, exceeding expectations with an adjusted EPS of $0.96 versus a consensus of $0.76. The company's total revenue for the quarter was $1.286 billion, surpassing the expected $1.240 billion, and showing a year-over-year growth of 21%.

Notably, cloud revenue reached $847 million, showcasing a 30% year-over-year increase, which was significantly higher than the previous guidance of 25.5% and also above a consensus estimate of 26%.

Data Center revenue also performed well at $362 million, up 32% year-over-year, exceeding the consensus expectation of 28%. Overall billings were robust at $1.470 billion, reflecting a 21% increase year-over-year.

Enterprise Growth and AI Opportunities

Analyst Adam Tindle from Raymond James commented on the sustained growth in the cloud segment and noted that the overall business appears durable, benefiting from enterprise opportunities as well. Atlassian's expansion into the enterprise market has provided potential but also carries risks, especially regarding customer acquisition costs.

Interestingly, Atlassian’s AI integration is gaining traction, with over one million monthly active users leveraging features from Rovo and Atlassian Intelligence. Analysts highlight that the introduction of paid AI features may enhance monetization opportunities moving forward.

Outlook Moving Forward

Fishbein from Truist Securities remarked on the stability achieved in Atlassian’s SMB segments, contrasting with previous challenges. He acknowledged the company's solid footing in the enterprise market and believes that ongoing initiatives could lead to further upside.

Keybanc analyst Jason Celino emphasized continued momentum in cloud and Data Center performance, boosted by positive trends in paid seat expansions and enterprise migrations. The company’s new cloud guidance of 26.5% growth is particularly encouraging.

With favorable results and emphasis on enterprise and AI, analysts are optimistic about Atlassian’s future. Price action reflects this sentiment, with TEAM shares rising by 13.1% to reach $310.95.

Conclusion

Overall, Atlassian's impressive quarterly performance and focus on enterprise growth and artificial intelligence are attracting positive attention from analysts, suggesting a potentially bright future as the company continues to expand its offerings.

Atlassian, Cloud, AI