What Happened?
Shares of devSecOps platform provider GitLab (NASDAQ: GTLB) jumped 5.4% in the morning session after the stock experienced an unusually large volume of bullish options trading.
On Tuesday, investors purchased 69,345 call options on the company, a massive 544% increase compared to the average daily volume. A surge in call options, which give investors the right to buy a stock at a set price, typically signals strong bullish sentiment, as traders are betting on the stock's price to rise in the near future. This positive investor outlook is supported by recent analyst commentary. Both Cantor Fitzgerald and BofA Securities have maintained their positive ratings on the stock, citing GitLab's long-term growth potential and the advancement of its Agent Platform.
Is now the time to buy GitLab? Access our full analysis report here, it’s free.
What Is The Market Telling Us
GitLab’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 8 days ago when the stock dropped 3.3% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week.
The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
GitLab is down 18.1% since the beginning of the year, and at $46.17 per share, it is trading 36.9% below its 52-week high of $73.14 from February 2025. Investors who bought $1,000 worth of GitLab’s shares at the IPO in October 2021 would now be looking at an investment worth $444.41.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
