What Happened?

Shares of IT project management software company, Atlassian (NASDAQ:TEAM) jumped 8.1% in the afternoon session after stocks extended their rebound, led by strong gains in the technology sector, as renewed optimism surrounding U.S.–China trade negotiations lifted investor sentiment.

Contributing to the bullish tone was a standout earnings report from enterprise software leader ServiceNow, which topped Wall Street's expectations on RPO, profit, and earnings. More importantly, the company's remaining performance obligations (RPO), a key forward-looking metric for future revenue, also exceeded forecasts, giving investors confidence that enterprise customers are not pulling back spending amidst uncertain macro.

The optimism was further reinforced by solid results from Texas Instruments and Lam Research. Their performance was especially encouraging for semiconductor stocks, which have been under pressure due to their exposure to global trade tensions. These results suggested that, despite macroeconomic uncertainties, demand in key tech verticals remained resilient.

The shares closed the day at $225.08, up 8.1% from previous close.

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What The Market Is Telling Us

Atlassian’s shares are very volatile and have had 20 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 biggest move we wrote about over the last year was 6 months ago when the stock gained 22.9% on the news that the company reported a "beat and raise" quarter. Third-quarter earnings beat analysts' revenue expectations, with all-important Cloud segment revenue growth handily beating expectations. Its gross margin also improved.

Looking ahead, guidance was strong, with the next quarter's cloud revenue growth of 27% year-on-year also above expectations and strong on an absolute basis. The company also raised its full-year revenue guidance for the Cloud and Data Center segments. There had been doubts about top-line momentum, especially for Cloud revenue, so this quarter puts a big dent in the bear case. Overall, this was a very solid quarter.

Atlassian is down 7.1% since the beginning of the year, and at $225.08 per share, it is trading 30.3% below its 52-week high of $322.94 from February 2025. Investors who bought $1,000 worth of Atlassian’s shares 5 years ago would now be looking at an investment worth $1,478.

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