Needham analysts upgraded GitLab (NASDAQ:GTLB) to Buy from Hold, setting a price target of $70 on the stock. The upgrade reflects growing confidence in GitLab’s ability to capitalize on its expanded product offerings and strong adoption of its Ultimate tier, particularly within the enterprise sector.

The analysts highlighted the recent introduction of innovative products like Duo Pro Enterprise and Dedicated as key drivers of GitLab's success, positioning the company for sustained demand at the higher Ultimate tier. They noted that GitLab's compliance and security capabilities are highly valued by large enterprise clients, further boosting Ultimate adoption over the Premium tier.

Additionally, pricing changes for the Premium SKU are expected to have a lasting positive impact on revenue, especially as these changes accumulate through fiscal 2026. The analysts also pointed out that GitLab's strong incremental margins, averaging around 40% year-to-date, could continue to contribute to revenue upside in the upcoming quarter.