In short: The counter-example to the software-disruption bear case, referenced with no view on the stock: "we saw recently with the Atlassian results, which was supposed to be one of the names getting disrupted. The stock was up 35% the next day."
Atlassian makes project-tracking and collaboration tools for software teams — the category most investors assumed AI would gut first, on the logic that if AI writes the code it also manages the work.
Niles cites it precisely because it was the consensus victim: "supposed to be one of the names getting disrupted. The stock was up 35% the next day" after results. No view on the stock is offered; the datapoint is doing the arguing.
What it argues is that the disruption fear was priced far ahead of the evidence, which is the same conclusion he reaches from software's 4% year-to-date return against a 60%+ semiconductor index — a possible margin of safety in the group he has so far avoided.
33:13And so those are the three that I've been like, okay, they should actually be fine because they shouldn't get disrupted. But we saw recently with the Atlassian results, which was supposed to be one of the names getting disrupted. The stock was up 35% the next day. You saw Workday, which I think was even in some ways you could argue more interesting because there was the news out that Silver Lake was looking to acquire them.
In short: Exhibit one in the three-step case that the SaaS-pocalypse trade was wrong. "On August 6th, Atlassian, which was in the bucket of software names widely considered at risk of being replaced by AI, rallied 35% the next day in reaction to solid earnings and outlook." Cited by Dan Niles as one of the three fundamental results (with Workday and Salesforce) now forcing the question of whether the technical reaction in software as a group is actually supported — "he now wonders whether the fundamental implications of Atlassian, Workday, and Salesforce are supportive of the technical reactions in the software stocks as a group, as agentic AI continues to ramp."
Atlassian makes the tools software teams use to organise work — Jira for tracking tasks, Confluence for documentation. It was squarely in the group of companies the market had written off as AI casualties: if machines write the code, why pay per human seat?
On 6 August it reported solid earnings and outlook and the shares rose 35% the next day.
Singh cites it as the first of three exhibits — with Workday and Salesforce — that forced Dan Niles to question his own framework. Niles has historically liked only three kinds of software: systems of record, security, and gaming. He now "wonders whether the fundamental implications of Atlassian, Workday, and Salesforce are supportive of the technical reactions in the software stocks as a group." The honest version of that thought is that three separate companies delivering results the bear case said were impossible is evidence, not noise.
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In short: Sold — position closed for the gain. Bought in March in the 70s, fell to the high 50s ("we were down like 20% on this name" and nearly sold at a loss), then +40% on the print and 165 today. "I've sold my TEAM and I'm happy to take the gain on it. I just don't have the confidence to own software in the same size I did before."
Atlassian makes the project-tracking and collaboration software many engineering teams run on. He bought it in March in the 70s, watched it fall to the high 50s, and was on the verge of selling at a loss — then it jumped 40% on earnings and now trades at 165.
He sold into that strength and took the gain. The reason is discipline rather than a changed view of the company: after the hedge-fund short unwind lifted every software name at once, he simply doesn't want the same size in software any more.
44:32I mean now it's at 165, but again, we were down like 20% on this name. And it was at 40% on the print. And I think a lot of that was because the AI guys who were long AI semis were shorting software names. But I've sold my TEAM and I'm happy to take the gain on it.
In short: Held position, second straight winning week: "Team also, which we own, absolutely crushed it and rallied 35%, as software has rallied after the situational awareness blow up, given all of the shorts they had in software versus long semiconductors."
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In short: Market color: up more than 40% last week, the biggest individual mover in Wapner's roll-call of the software squeeze (alongside Palantir +30%, ServiceNow +9.5%, Snowflake +7.5%). No individual committee call.
In short: The week's biggest winner in the book — "we had Team where we had a position, the stock was up 32%" pre-market and almost 40% on the day, on $1.87 EPS vs $1.50 consensus. "This is not a small beat." Deck page 60.
Atlassian makes the project-tracking and collaboration tools software teams use — Jira and Confluence. It was the book's biggest winner of the week: earnings came in at $1.87 per share against $1.50 expected, and the stock rose 32% before the open and nearly 40% intraday. "This is not a small beat."
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In short: Enterprise breakout. Q4 (June quarter) revenue +28% Y/Y to $1.77B (a $110M beat) with adjusted EPS $1.87 ($0.37 beat), Cloud revenue accelerating again to 31% growth at $1.2B and GAAP operating margin at 12%; shares surged more than 30%. Atlassian signed its largest enterprise deal ever and set records for $1M, $3M and $5M ACV deals — the $3M+ ARR cohort grew 50%+ and the $5M+ cohort 70%+ — with RPO +44% to $4.8B. AI looks like part of the consolidation reason: Rovo is used across more than 80% of the Fortune 500, the Teamwork Graph connects 200B+ objects and relationships across Jira and Confluence, "that proprietary company context makes its agents more useful than a generic model alone," and Rovo adopters grow ARR at more than twice the rate of non-adopters. FY27 guidance looks slower — ~13% total revenue growth with Data Center revenue falling 17% as customers migrate and upfront license recognition rolls off — but the cleaner indicators are 18% subscription-ARR growth and 25.5% Cloud growth, with Q1 FY27 Cloud guided to +28.5% and GAAP profitability maintained at a 4.5% margin. "The underlying Cloud and enterprise business enters the year with more momentum than the headline 13% suggests." A disclosed author holding.
Atlassian makes Jira and Confluence — the tools software teams use to track work and write things down. Revenue grew 28%, its cloud business accelerated to 31%, and the shares rose more than 30%.
What changed is the size of its customers. Atlassian signed its largest enterprise deal ever, and the number of customers paying more than $3 million a year grew over 50%, with the $5 million cohort up over 70%. Contracted-but-not-yet-delivered revenue rose 44% to $4.8 billion, which gives unusually good visibility into next year.
AI appears to be why big companies are consolidating onto Atlassian rather than buying separate tools. Its assistant, Rovo, is used somewhere inside more than 80% of the Fortune 500, and it draws on a "Teamwork Graph" of over 200 billion connections between tickets, documents and people. A general-purpose AI model doesn't know how your company works; one wired into your own project history does. The proof point: customers who adopt Rovo grow their spending at more than twice the rate of those who don't.
One thing to look past: next year's headline growth guidance is only about 13%. That is because Atlassian's old self-hosted "Data Center" product is being retired as customers move to the cloud, and the accounting for those licences rolls off. The forward-looking numbers — 18% subscription growth and 25.5% cloud growth — describe the actual business. The author owns it; analysis, not a recommendation.
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