$TEAM

Enterprise software stocks rose on Wednesday, with Atlassian (TEAM), Monday.com (MNDY), Salesforce (CRM), and ServiceNow (NOW) up 2-3%. Atlassian announced accelerated U.S. federal cloud investments. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1% while the Invesco QQQ Trust (QQQ) fell 0.88%. Rising long-term Treasury yields typically pressure such stocks, making the rally unusual.

Investors are focusing on software stocks tied to cybersecurity and cloud collaboration, despite rising Treasury yields. Commvault Systems, Atlassian, and HubSpot show varying market valuations and growth strategies. Commvault's revenue was $1.22B, Atlassian's $6.57B, and HubSpot's $3.45B. Each faces unique risks related to market adoption and competition.

Atlassian (TEAM) stock rose 132% from mid-June to September 18, driven by AI-related earnings beats. Analysts maintain mostly positive ratings, with a mean target of $199. TIKR projects a 45% total return by June 2031. The surge followed strong revenue growth and bullish AI commentary from management.

Atlassian (TEAM) launched AI tools for Jira, enabling engineering teams to delegate coding tasks to AI agents while maintaining oversight. Features include Code Context for agent visibility and Agent Context Controls for access management. The company claims teams using Atlassian context ship 64% more per developer. The tools aim to address the gap in scaling AI across the development lifecycle, though adoption may be slow.

Atlassian warns Australia has a limited time to use AI for cybersecurity defense. The company urges stronger regulations to protect consumers and boost trust. OpenAI and Elon Musk backed calls for slower AI development. Australian Signals Directorate director-general Abigail Bradshaw highlighted the need for early risk identification. The government will be questioned on its security measures.

Mizuho upgraded Atlassian (TEAM) to its top software pick, raising its price target to $215 from $175. The firm cited cloud price increases and usage-based pricing as growth drivers. Atlassian's cloud revenue grew 31% YoY in Q4, and BTIG raised its target to $230.

Atlassian reported accelerated cloud revenue growth (31% YoY) in Q4, driven by customer expansion and cross-selling. The company highlighted the migration from Data Center to cloud as a multiyear opportunity, with customers spending 1.75x more post-migration. Atlassian also emphasized AI adoption, with Rovo AI seeing increased usage and driving higher ARR growth for customers. The company expects to achieve a 4.5% GAAP operating margin by fiscal 2027, balancing AI investments with profitability.

Pegasystems (NASDAQ:PEGA) reported Q2 revenue of $420.7M, up 9.4% YoY, missing estimates by 1.5%. ServiceNow (NYSE:NOW) reported $3.99B revenue, up 24% YoY, beating estimates. Zoom (NASDAQ:ZM) reported $1.28B revenue, up 4.9% YoY, with mixed results. Stocks reacted accordingly, with NOW up 38.3%, PEGA up 17.1%, and ZM down 5.1%.

Shares of enterprise software and SaaS companies, including Atlassian (TEAM), Palo Alto Networks (PANW), SentinelOne (S), monday.com (MNDY), and Freshworks (FRSH), rose as investors shifted from semiconductor and AI-hardware stocks. The move followed calls for a pause in AI development, reducing concerns about AI displacing traditional software. SentinelOne's stock surged 15.3%, nearing its 52-week high, despite volatility and recent market downturns.

Atlassian's stock rose 3.0% to $185.12 in pre-market trading, defying a broader tech selloff. The gain follows strong fiscal Q4 2026 results, with EPS of $1.87 vs. $1.50 expected and revenue of $1.766B vs. $1.66B anticipated. Analysts raised price targets, citing cloud growth and AI monetization. The Nasdaq and S&P 500 declined 1.9% and 0.8%, respectively.