Atlassian’s AI Bet Is a Game Changer for TEAM Stock Investors


  • At its Team ’23 conference, Atlassian (TEAM) announced generative AI innovations via a partnership with OpenAI to develop Atlassian Intelligence.
  • Atlassian Intelligence is a virtual assistant that enhances existing cloud software systems and improves user engagement.
  • Despite macroeconomic pressures, Atlassian’s strategic focuses and the incorporation of generative AI have increased revenues, delivered strong customer retention rates, and positioned the company for long-term growth.
TEAM Stock - Atlassian’s AI Bet Is a Game Changer for TEAM Stock Investors

Source: T. Schneider /

Last week, business software provider Atlassian (NASDAQ:TEAM) held its Team ’23 conference in Las Vegas, Nevada. The company announced a wide array of new features across its offerings like Jira Software, Jira Service Management and Confluence.

But all this paled compared to Atlassian’s generative artificial intelligence (AI) innovations. Since the launch of OpenAI’s ChatGPT in late November, this technology has quickly transformed the industry. Granted, many companies are essentially hyping “vaporware.” That said, there are plenty of AI stocks that are legitimate.

Yet Atlassian is different and on a different level. Its generative AI is poised to be a force multiplier for its growth. And should bolster TEAM stock for the long term.

Generative AI Magic for TEAM Stock

Generative AI is relatively new. A key innovation is the transformer model, which allows for much more sophisticated processing of sequential data like text and language. Training on vast repositories of information makes it possible to have true natural language interactions.

This means that business software will become more engaging and useful. There will be less training. The insights will be more impactful. The cost savings are more significant.

In light of these benefits, it should be no surprise that Wall Street has been captivated by artificial intelligence stocks.

While TEAM stock does not necessarily fit within this category, it should benefit nicely from generative AI. The company has partnered with OpenAI to leverage the technology across its existing cloud software systems. It calls this Atlassian Intelligence.

Keep in mind that this is not a case where Atlassian is scrambling to come up with something relevant or suddenly remake itself into an AI stock. The fact is that the company has spent years developing cutting-edge AI. This has been helpful in discovering information in massive knowledge bases or allowing for quick replies in the software.

TEAM stock also has a major competitive advantage: It has massive amounts of valuable data about millions of teams. The company refers to this as the “Teamwork graph.” This will allow for more personalized interactions and better insights.

Atlassian Intelligence’s Many Use Cases

In a sense, Atlassian Intelligence is similar to Microsoft’s (NASDAQ:MSFT) Copilot. It’s about being a virtual assistant that’s on call 24/7. It’s not a replacement for employees.

The use cases are seemingly endless. With Confluence, you can use a natural language prompt to craft a press release based on existing product specifications. This can be in the voice of the brand.

Or an employee can summarize and extract information about meetings, competitive information, or details about a benefits plan — in seconds. They can use this information to generate emails with different tones and priority levels. All this is bolstered with an on-demand glossary. Then there are deep integrations with other platforms, like Salesforce’s (NYSE:CRM) Slack and Microsoft Teams.

While the technology is still in its early stages, it has already been shown to move the needle. Generative AI resolves more than 50% of requests for Atlassian’s internal support department.

The Growth Engine

Along with many other business software providers and even some artificial intelligence stocks, TEAM stock has suffered from macroeconomic pressures. Customers are looking at ways to pare back IT expenses and consolidate their solutions.

But Atlassian is positioned to be a winner. The company has a competitive pricing model. Migrating to Atlassian often results in much lower licensing costs. The generative AI will also help with the bottom line. Teams will be more agile, spending less time on mundane and tedious activities.

In the meantime, Atlassian has restructured its operations. The company is focusing on those initiatives that show the most promising return on investment (ROI). Then in March, it laid off about 5% of its workforce.

The latest quarterly report shows that Atlassian’s strategy is getting results. Total revenues jumped by 27% to $872.7 million, and subscription revenues rose by 40%. While the company sustained a loss, the gross margin was still at a respectable 82.8%. The retention rate was 98%.

Takeaway on TEAM Stock

At the Team ’23 conference, legendary director James Cameron was a keynote speaker. One of his themes was that tough times can ultimately be the best moments — that is, when you reflect on them.

So while the software industry is navigating rough waters, this should prove temporary. Technology is strategic for many companies. And top providers like Atlassian will be the long-term beneficiaries, especially as they continue to innovate their platforms and provide strong value to customers.

On the date of publication, Tom Taulli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Tom Taulli is the author of various books. They include Artificial Intelligence Basics and the Robotic Process Automation Handbook. His upcoming book is called Generative AI: How ChatGPT and other AI Tools Will Revolutionize Business.


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