Atlassian Price Target Raised to $330: Raymond James Sees Strong Growth Ahead

Atlassian (TEAM) shares surged in extended trading on Thursday after the software company issued an upbeat revenue outlook amid robust demand for its AI-powered cloud offerings. The price sits poised to stage a breakout above a pennant in Friday’s trading session, signaling a continuation of the stock's strong uptrend. Investors should watch key overhead areas on Atlassian's chart around $335, $400, and $460, while also eyeing an important support level near $288.

Atlassian shares jumped 20% in extended trading on Thursday after the software company issued an upbeat revenue outlook amid robust demand for its AI-powered cloud offerings. The company, which offers customers a range of collaboration tools, including a recently released AI assistant that allows users to customize enterprise data, has seen its shares jump more than 40% over the past three months through Thursday's close. The stock rose 20% to $319 in after-hours trading.

Raymond James analyst Adam Tindle significantly increased Atlassian's price target from $250 to $330, driven by several key factors:

1. Cloud Growth at Scale: Atlassian's Cloud revenue reached $847 million, up 30% year-over-year, well ahead of guidance of 25.5%. This marked a slight decline from 31% last quarter but exceeded the consensus estimate of 26%. Tindle noted that this elite Cloud growth at scale suggests durability in the company's performance.
2. Enterprise Focus: Atlassian has landed 85% of the Fortune 500, representing a $14 billion opportunity. The company has hired a new CRO with roots at SAP, indicating a strategic focus on expanding its enterprise customer base.
3. AI Opportunity: Atlassian's AI strategy, highlighted through sensitivity analysis on Rovo, is gaining momentum with 1 million+ monthly active users of Rovo and Atlassian Intelligence features. The introduction of paid SKUs for AI has become an increased focus, which could be very meaningful over time with proper execution.
4. Stability in SMB Segments: Atlassian called out stability in the SMB segments that had challenged the business in prior years, as well as traction with their enterprise sales motion and new product offerings. This stability provides a solid foundation for driving upside to expectations through the year.

These factors contribute to Atlassian's long-term prospects by indicating strong growth potential in its Cloud business, a strategic focus on expanding into the enterprise market, and the development of AI capabilities that could drive significant value over time. The stability in SMB segments also suggests a more robust business model that can weather market fluctuations.

Atlassian's recent financial performance and growth prospects have been strong, with the company reporting impressive revenue growth and expanding its customer base. In the fiscal second quarter of 2025, Atlassian achieved a revenue growth rate of 21.48%, driven by robust demand for its AI-powered cloud offerings. This growth is particularly notable given the company's size and market capitalization, which are below the industry average.

In comparison to its peers in the software industry, Atlassian's growth prospects appear to be quite favorable. The company has been able to maintain a strong growth trajectory despite the challenging macroeconomic environment, and its focus on AI and cloud-based solutions has positioned it well for the future.

Atlassian's strong financial performance and growth prospects have implications for its valuation and price target. The company's market capitalization is below the industry average, suggesting that it may be relatively undervalued compared to its peers. Additionally, Atlassian's impressive revenue growth and expanding customer base indicate that the company has significant growth potential, which could drive its valuation higher in the future.

Analysts have taken notice of Atlassian's strong performance and have raised their price targets accordingly. The average one-year price target for Atlassian has been revised to $267.28 per share, representing an increase of 11.92% from the prior estimate of $238.81. This price target represents an increase of 30.74% from the latest reported closing price of $204.44 per share.

In conclusion, Atlassian's recent financial performance and growth prospects compare favorably to its peers in the software industry, and this has implications for its valuation and price target. The company's strong growth trajectory and focus on AI and cloud-based solutions position it well for the future, and analysts have taken notice by raising their price targets accordingly. Investors should watch key overhead areas on Atlassian's chart around $335, $400, and $460, while also eyeing an important support level near $288.