GitLab Inc. shares fell by as much as 49% this year after management provided full-year forecasts that fell below Wall Street estimates. However, the company’s growth rates remain impressive.
GitLab is leveraging improvements in AI to enhance programming and software development. CEO Sid Sijbrandij highlighted that organizations are increasingly integrating AI into all aspects of software development to deliver tangible results. GitLab, a leader in the DevSecOps space, helps programmers collaborate, automate product delivery, and add built-in security to their software.
The company’s new AI coding assistant tool, GitLab Duo, has driven demand. In Q2, GitLab’s revenues of $183 million beat Wall Street estimates. Earnings per share of $0.10 exceeded forecasts by 50%.
With shares trading 31% below their 2024 highs, GitLab is well-positioned to rebound with the expected tech recovery. Seagate Technology is a significant player in the hard disk drive (HDD) industry, a cyclical business known for its booms and busts. Over the past few years, Seagate has shifted its focus to mass-capacity drives for cloud providers, driven by the increasing data storage needs of AI applications.
Ai-driven tech resurgence
Goldman Sachs analysts predict substantial investments in AI-related infrastructure, creating a potential boom period for Seagate. Forecasts suggest Seagate’s revenues could surge by 40% this year and another 13% in fiscal 2026.
The company’s high operating leverage could enhance profitability significantly. While the advent of solid-state drives (SSDs) poses a long-term threat, Seagate’s current business cycle provides an attractive entry point for short-term investors. Oscar Health is a tech-forward health insurance startup that leverages technology to offer personalized health plans, virtual primary care, and an optimized provider network.
The company receives high net promoter scores, reflecting robust policyholder loyalty. Oscar is projected to increase revenues by 20% annually through 2027. It has performed well in Louis Navellier’s Portfolio Grader due to its sales growth, positive earnings surprises, and institutional buying.
With shares more than doubling in 2024 yet still trading below their 2021 IPO levels, Oscar presents a growth opportunity at a discounted valuation. Its rapid earnings growth rate translates to a low P/E ratio, making it attractive compared to slower-growing legacy insurers. While September historically tends to be a challenging month for stocks, the current market conditions are favorable for tech and healthcare sectors.
As these sectors thrive during mid-stage recoveries, these three AI-related stocks, GitLab, Seagate Technology, and Oscar Healthcare, are well-positioned to benefit from ongoing economic changes and investor interest.
