Macquarie Downgrades GitLab to Neutral, Cuts Target Price to $40

Macquarie downgraded GitLab to Neutral from Outperform, cutting its target price to $40 from $70. The brokerage cited uneven execution, weakening customer segments, and structural risks such as budget shifts toward AI tools and rising competitive pressure from Microsoft GitHub. Revenue growth slowed to 25% YoY, and the guidance increase fell short of the company's historical beat and raise pattern. Macquarie trimmed long-term revenue expectations and applied lower valuation multiples, driving a 43% reduction in its target price.