Will Atlassian's (TEAM) AI Acquisitions Reshape Its Cloud Growth Story?

In recent weeks, Atlassian announced definitive agreements to acquire engineering intelligence leader DX for approximately US$1 billion and The Browser Company for US$610 million, both aimed at strengthening its AI capabilities and platform intelligence. These acquisitions and board-level share sales have coincided with fund manager exits, reflecting investor uncertainty around Atlassian's cloud growth trajectory, evolving business model, and the pace at which new AI investments can generate meaningful revenue. We'll explore how the DX acquisition and ongoing business model concerns may challenge or reinforce Atlassian's outlook for AI-led growth and margin expansion.

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Atlassian Investment Narrative Recap

To own Atlassian today, you need to believe its heavy bets on AI and cloud will drive both adoption and eventual monetization, outpacing competitive pressures and market skepticism. While recent acquisitions of DX and The Browser Company strengthen platform AI capabilities, their immediate financial impact appears limited; the real short-term catalyst remains enterprise migration to Atlassian’s cloud platform, with execution risk on complex migrations currently the biggest challenge to near-term revenue growth.

Of particular relevance is Atlassian's agreement to acquire DX for US$1 billion, aimed at helping enterprises measure how AI investments accelerate engineering productivity. This underscores the company's continued push to deepen AI integration, a key catalyst for unlocking future growth, if these features achieve meaningful uptake and adoption amongst large enterprise users.

By contrast, it remains crucial for investors to be aware that persistent delays or unexpected hurdles in migrating Atlassian’s largest, most complex customers to the cloud could...

Read the full narrative on Atlassian (it's free!)

Atlassian's outlook anticipates $8.7 billion in revenue and $310.2 million in earnings by 2028. This is based on a projected annual revenue growth rate of 18.7% and an earnings increase of $566.9 million from the current -$256.7 million.

Uncover how Atlassian's forecasts yield a $249.51 fair value, a 64% upside to its current price.

Exploring Other PerspectivesTEAM Community Fair Values as at Oct 2025

Simply Wall St Community members estimated fair values for Atlassian between US$201 and US$279, with nine unique viewpoints featured. Cloud migration progress, especially among large enterprises, is a clear focal point that could influence performance outcomes regardless of the community’s wide-ranging opinions.

Story Continues

Explore 9 other fair value estimates on Atlassian - why the stock might be worth as much as 84% more than the current price!

Build Your Own Atlassian Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

A great starting point for your Atlassian research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Our free Atlassian research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Atlassian's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TEAM.

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