What Happened?
Shares of collaboration software company Atlassian (NASDAQ:TEAM) fell 3.4% in the afternoon session after several analyst firms lowered their price targets on the stock, citing concerns about competition from AI and slowing cloud revenue growth.
BTIG, for instance, reduced its price target to $110 from $140, noting that while it expects Atlassian to beat earnings expectations, it also anticipates that organic cloud revenue growth will slow down.
Other firms, including TD Cowen, Truist Securities, and KeyBanc, also cut their price targets. This sentiment aligns with a broader market trend where investors have been selling software shares in favor of chip stocks.
The shares closed the day at $68.60, down 2.5% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Atlassian? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Atlassian’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 5.9% on the news that sentiment in the enterprise software sector improved as peer SAP reported strong earnings.
The rally in the sector was sparked when German software giant SAP announced better-than-expected first-quarter profit and confirmed its long-term cloud outlook. SAP's strong performance appeared to ease investor concerns about the impact of artificial intelligence on the broader enterprise software industry. This positive news likely spilled over to peers like Atlassian, as investors showed renewed confidence in established software companies.
Atlassian is down 53% since the beginning of the year, and at $72.73 per share, it is trading 68.3% below its 52-week high of $229.52 from May 2025. Investors who bought $1,000 worth of Atlassian’s shares 5 years ago would now be looking at only $306.16.
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