TEAM stock crashed 73% from its 2021 peak. Investors panicked about AI disrupting enterprise software. They sold the stock down to seventy-six dollars. But while traders fled, customers signed. Cloud revenue crossed $1 billion in a single quarter. Commitments locked in through 2029. The market saw yesterday's software. The contracts revealed tomorrow's infrastructure.
The AI Panic: Why Enterprise Software Got Crushed
The AI panic hit enterprise software hard. Traders feared businesses would build their own tools with AI agents. Every collaboration platform looked vulnerable. Atlassian shares dropped 80% from all-time highs. The sell-off was indiscriminate. But while the stock collapsed, the business kept compounding. Cloud revenue grew 26% year over year. Total revenue hit 1.6 billion dollars in a single quarter. The market narrative diverged from the financial reality.
The Contract Signal: Why $3.8 Billion in Commitments Matter
The market missed the most important number. Remaining Performance Obligations reached $3.8 billion, up 44% year over year. These aren't projections. They're signed contracts. Customers committing to Atlassian through 2027, 2028, and 2029. If AI were truly disrupting the platform, multiyear commitments would collapse. They're accelerating instead.
The Stickiness Proof: Why 120% Retention Disproves the Thesis
The AI disruption narrative ignored what Atlassian was actually doing. Rovo, their own AI platform, reached 5 million monthly active users. Customers using AI features expand seats faster and create more tasks. Net revenue retention stayed above 120% for three consecutive quarters. For every dollar lost, Atlassian gains a dollar twenty from upsells and expansions. AI isn't cannibalizing the platform. It's making it stickier.
The Valuation Gap: Why Analysts See 133% Upside
Twenty-four analysts cover the stock. Their average price target implies 133% upside from current levels. The board authorized a $2.5 billion buyback. The CEO called the stock significantly undervalued. Free cash flow reached 1.4 billion dollars. The company isn't burning cash on AI experiments. It's generating record cash while integrating AI profitably. The panic created the opportunity.
The panic was about disruption. The data showed expansion. Cloud revenue crossed a billion dollars. Commitments accelerated. AI users reached five million. The market saw a software company threatened by AI. The numbers showed a platform becoming more essential, not less. The market priced fear. The customers priced confidence.