Cathie Wood is the founder, CEO, and chief investment officer of ARK Invest. Wood is known for her bold investment strategies, focusing on disruptive innovation, particularly in technology, AI, genomics, robotics, fintech, and blockchain-related stocks. Wood has been actively increasing her company’s GitLab (GTLB) holdings in recent months. This investment is consistent with ARK Invest's strategy of focusing on innovative technology companies with significant growth potential.
GitLab provides a DevSecOps platform, with integrated solutions that improve developer productivity, operational efficiency, and security compliance. The company’s AI-enabled platform allows organizations to streamline software development processes. Valued at $9.5 billion, GitLab stock is down 1.3% in the year to date.
Let’s find out why Cathie Wood is interested in this under-the-radar AI stock and if it is a buy now.
Wood has been investing heavily in GitLab for the past few months. Starting on March 4 through March 6, the investor has been buying up GTLB shares through her ARK Innovation ETF (ARKK) and the ARK Next Generation Internet ETF (ARKW). She most recently added $4 million of GTLB to the ARKK ETF on March 6. She also added $1.2 million in shares to the ARKW ETF on the same day.
In the fourth quarter of its fiscal 2025, the company reported a 29% year-over-year increase in revenue to $211.4 million. Total revenue for the year came in at a 31% increase to $759.2 million. The company benefits from the growing use of cloud-native and AI-driven development tools, establishing itself as a critical infrastructure provider for businesses worldwide. Furthermore, GitLab operates debt-free, giving it greater financial stability and flexibility to grow. Its number of large customers (those spending more than $100,000 per year) increased by 29%. Furthermore, customers with more than $1 million in ARR increased by 28%, indicating that enterprise adoption has improved. Total RPO (remaining performance obligation), or potential revenue yet to be realized, stood at $945 million, a 40% increase. The net retention rate stood at 123%, indicating that it is retaining customers.
GitLab maintains a high adjusted gross margin, currently at 91%, indicating strong pricing power and efficient cost management. The company also reported a net profit of $0.33 per share, up from $0.15 per share the year before. Adjusted earnings per share increased to $0.74 from $0.20 in fiscal 2024. Management expects a 23% increase in revenue in fiscal 2026, which is consistent with consensus estimates. Analysts predict that revenue will rise by another 22.7% in fiscal 2027. Analysts also predict that earnings per share will fall 1.7% to $0.73 in fiscal 2026, while increasing 33% to $0.97 in fiscal 2027. As a high-growth stock, GitLab's valuation remains high, at 84 times forward 2026 earnings.
What Does Wall Street Say About GitLab Stock?
Like Cathie Wood, Wall Street is strongly bullish about GitLab stock. Of the 26 analysts that cover the stock, 20 rate it a “Strong Buy,” three suggest a “Moderate Buy,” and three say it is a “Hold.” The average target price of $78.96 suggests a potential price jump of 41% from current levels. Plus, the high price estimate of $90 suggests upside potential of 61% over the next 12 months.
The Bottom Line on GitLab Stock
GitLab’s innovative platform, robust financial performance, and solid balance sheet likely contributed to Cathie Wood’s decision to increase ARK Invest’s stake in the company. GTLB stock is down 21.4% from its 52-week high, making it a good time to buy this under-the-radar AI stock now.
