GitLab soars on plan for new AI-powered product

FILE PHOTO: Artificial Intelligence words are seen in this illustration taken March 31, 2023. REUTERS/Dado Ruvic/Illustration./

NEW YORK (Reuters) - Shares of GitLab Inc jumped more than 35% on Tuesday after the software development platform announced plans to launch a revenue-boosting artificial intelligence (AI)-powered product.

GitLab, widely used by software developers for coding work, will add a "ModelOps" feature to its main "DevSecOps" platform with new capabilities including code writing suggestions. The product is expected to be launched this year at $9 per month, GitLab said late Monday.

"The product ... has the potential to be a healthy growth driver in FY25," Bank of America analysts led by Koji Ikeda said in an investor note.

GitLab's stock rose as much as 35.4%, its biggest one-day percentage jump since the company went public in 2021. It was up 31.8% at $46.66 at mid-afternoon.

GitLab said on Monday its first-quarter revenue jumped 45% to $126.9 million, beating the Refinitiv consensus estimate and the company's earlier forecasts. Multiple analysts raised their price targets for GitLab's stock on the news.

Eighteen analysts on average recommended buying GitLab shares, and set a median price target of $53.50, according to Refinitiv.

(Reporting by Chibuike Oguh in New York; editing by Lance Tupper and Richard Chang)

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