Atlassian: A Dip, Not a Disaster

The market, as anyone who’s spent more than five minutes observing it will tell you, is a remarkably excitable beast. Currently, it’s thrown a bit of a fit over Atlassian, a purveyor of digital workspaces, causing its stock to stumble some 21% this year. A perfectly good company, mind you, but the market, like a particularly judgmental goblin, often focuses on the momentary wobble rather than the underlying sturdiness. It appears a new conjuration from Anthropic – a feature called ‘Cowork’ – has spooked the traders. Cowork, you see, is an agentic artificial intelligence, capable of, well, just about anything. Which, naturally, leads to speculation that it might render perfectly good software – the kind Atlassian sells – somewhat…redundant.

Now, before everyone starts building bunkers and hoarding parchment, let’s consider this. The Guild of Alchemists and Venture Capitalists (Wall Street, to the uninitiated) is, by and large, still optimistic. They’ve revised their prophecies (price targets, they call them), but even after the recent tremors, most see a considerable upward trajectory for the stock. A median prediction of $225 suggests a potential 76% rebound. That’s a rather substantial return, even for those of us accustomed to the frankly ludicrous valuations occasionally seen in this sector.

Is AI Friend or Foe?

The concern, naturally, is that Cowork – and others like it – might usurp the functions of Atlassian’s collaborative software. It’s a valid question. However, shifting an entire workforce from one system to another is… complicated. Imagine trying to teach a troll to appreciate fine embroidery. It’s not impossible, but it requires an awful lot of patience, a very sturdy needle, and a willingness to accept a certain amount of chaos. The disruption, the retraining, the sheer inertia of habit… these are not easily overcome. And let’s not forget the subtle art of office politics. People will resist change simply because they can, and because they enjoy complaining about it.

Furthermore, Atlassian isn’t standing still. Over 3.5 million workers are already experimenting with AI features within their existing tools. They’re cleverly integrating these enhancements, rather than attempting to obliterate everything and start anew. This is a crucial distinction. It’s like adding a small, helpful imp to your existing workforce, rather than unleashing a dragon. And the increasing use of Jira – originally designed for tracking software bugs, but now employed for everything from managing cat grooming appointments to orchestrating interdimensional trade negotiations – is a testament to its adaptability.

In May of 2024, Atlassian unveiled Rovo, its own AI agent platform. It collects, organizes, and analyzes data across all their software, providing insights and automating workflows. Essentially, it’s a digital scribe, capable of deciphering the cryptic pronouncements of middle management and translating them into actionable tasks. It’s a direct response to the likes of Cowork, but built within the existing ecosystem. A subtle, but significant, advantage.

And, shrewdly, Atlassian is using this AI integration to nudge customers towards cloud-based subscriptions. They’re phasing out their data center software in the coming years, which will streamline maintenance and accelerate the rollout of new features. It’s a bit like dismantling a crumbling fortress and building a sleek, modern tower in its place. A bit disruptive, perhaps, but ultimately beneficial.

Analysts have, indeed, adjusted their predictions downwards, but the overall sentiment remains positive. Mizuho, for example, lowered their target from $245 to $225 (still implying a 76% upside). Even Citigroup, ever the cautious observer, reduced their target to $210 (a still-respectable 64% gain). At a current price of 26 times forward earnings, and with earnings growing at a rate of 25% per year, this looks like a rather attractive entry point. It’s not a guarantee of riches, of course. Nothing ever is. But it’s a solid company, navigating a rapidly changing landscape, and that, in my book, is worth a closer look.

2026-01-26 19:13

Is AI Friend or Foe?

Read More