Truist Cuts GitLab Price Target to $35 Citing Terminal Value and AI Risks
On February 5, Truist cut GitLab’s price target to $35 from $42 and kept a Hold rating, citing long-term terminal value risks and the rising importance of AI strategies. It noted that seat-based revenue models underperformed in 2025, making AI adoption and a shift from seat-based deployments essential.
1. Price Target Cut
On February 5, Truist reduced GitLab’s price target to $35 from $42 and maintained a Hold rating, pointing to long-term terminal value risks and the growing importance of AI-driven strategies for sustaining growth.
2. Seat-Based Model Underperformance
Truist highlighted that seat-based revenue models underperformed throughout 2025, signaling market pressure on traditional license structures and underscoring the need for GitLab to pivot toward AI-centric deployments.
3. Morgan Stanley Downgrade
On January 12, Morgan Stanley shifted GitLab to an Equal Weight rating from Overweight and cut its price target to $42 from $55, anticipating FY2027 as a transition year marked by slower growth and competitive risks from AI-focused startups.