Middle Coast Investing on GitLab Inc.
Thesis
GitLab has benefited from growing appreciation that AI development can boost demand for software development tools. The investor still recognizes the positive operating thesis but sold about 40% of the position after strong market performance. The shares were no longer particularly cheap, and AI market narratives can reverse quickly.
“the thesis is playing out that AI creates more demand for its software tools”
Key risks
- Valuation is no longer especially cheap
- The AI demand narrative could change quickly
- Expected developer-tool demand may disappoint