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Atlassian Just Pulled Off the Software Comeback Wall Street Wanted

Written by Dan Schmidt

Sometimes you can call it a comeback. Shares of Atlassian Corp PLC (NASDAQ: TEAM) exploded 35% higher on Friday, Aug. 7, following an impressive earnings report that left investors thrilled and analysts scrambling to raise price targets.

The stock has completed an impressive turnaround in 2026, shrinking its year-to-date (YTD) loss after a brutal first-half sell-off. But unlike many of its peers posting impressive results, Altassian guided a revenue decline next year, dropping from 26% year-over-year (YOY) in fiscal 2026 to 13% YOY growth in fiscal 2027. How does a stock trading at 220 times forward earnings jump 35% on a declining revenue guide? Because it’s actually part of the plan.

Atlassian’s Shifting Revenue Mix Explains Market Reaction

Atlassian reported its Q4 fiscal year 2026 results after the market closed Aug. 6, and the headline numbers were impressive. Earnings-per-share (EPS) of $1.87 beat consensus estimates by 24.7%, and the revenue figure of $1.77 billion represented YOY growth of more than 27%. Annual recurring revenue (ARR) from subscriptions grew 23% YOY to $6.61 billion, and Remaining Performance Obligations (RPO) grew 44% YOY to $4.82 billion.

But the guidance, at least at first glance, appears tepid. Management expects total revenue to grow just 13% in fiscal 2027, half the rate of growth in fiscal 2026. The company also expects slightly slower Cloud revenue and Subscription ARR growth, while guiding for a 17% contraction in Data Center revenue. However, this is part of the company’s plan to migrate Data Center clients over to the Cloud. Atlassian announced plans to sunset the Data Center segment back in 2025, with End of Life (EOL) scheduled for March 2029. Revenue leaving the Data Center segment isn’t disappearing; it’s simply shifting to another part of the business. Plus, Atlassian can sell Cloud customers premium AI features like Rovo, which offer the company more recurring revenue and a higher annual retention rate. Investors anchoring to the 13% headline are pricing in a business that is in the middle of a deliberate dismantling and replacement with a more lucrative one.

Growing Backlog Leads to Analyst Upgrades

The breakdown between ARR and RPO is another important factor in the report. Subscription ARR is the current subscription base annualized, meaning it’s one period extrapolated over the full 12 months. RPO is the backlog; money that’s been agreed to in contracts and that Atlassian is committed to delivering, but doesn’t yet show up as revenue. ARR looks backward, while RPO looks forward. And RPO growing at nearly twice the rate of ARR means contract duration and size are expanding, as management’s comments bear out. Inked contracts valued at $3 million and $5 million have grown by 50% and 70% YOY, setting company records and signaling that future revenue is becoming more visible and durable.

Analysts were quick to note the backlog expansion and the increasing durability of revenue. The stock received 17 new price targets following the Q4 2026 release, all of which were boosts or new coverage initiations, signaling increased demand for the stock. The average of the 14 new price targets is $176.27, representing upside of more than 14% from current levels. But while several of the price targets now sit at $200, analysts at TD Cowen and UBS Group maintained a Hold/Neutral rating on the stock, so not everyone covering the shares has conviction over the business mix shift.

Chart Hinted at Upward Momentum Building Before Earnings Call

Even the U.S. Men’s soccer team would cringe at TEAM’s first-half performance. The drawdown was precipitous, and by April the share price was stuck far below the 50-day and 200-day moving averages. But investors who have been eying the TEAM chart over the last few weeks may have spotted the breakout before the earnings release.

The stock bottomed in early April, but the Moving Average Convergence Divergence (MACD) indicator flipped a bullish cross in early March, hinting that selling pressure was beginning to fade. TEAM shares retook the 50-day moving average shortly after the MACD signal and used it as support during three months of consolidation. Another bullish MACD cross reappeared in the weeks leading up to the Q4 results, and now the post-earnings pop is holding its gap.

The software apocalypse was always an overstated concern, and companies like Atlassian have proven that AI can be an asset, not a threat. However, this was a very quick repricing following a single earnings report. The market won’t be as generous next time now that valuation is no longer distressed and the stock is starting to look overbought. TEAM has recovered from the losses the SaaS panic triggered, and further upside depends on monetizing migrating Cloud customers and continued growth in large contract volume. READ THIS STORY ONLINE

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AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be

Written by Jessica Mitacek

After last week’s successful launch of its three newest BlueBird satellites, investors entered the week with hopes that space-based cellular broadband network provider AST SpaceMobile (NASDAQ: ASTS) could continue that momentum when it reported Q2 earnings on Monday, Aug. 10.

However, the report dashed those hopes when the Midland, Texas-based direct-to-device (D2D) SpaceX (NASDAQ: SPCX) rival announced disappointing financials after the market closed.

Shares initially slipped after the report, and have now fallen more than 48% from their all-time high on May 28.

AST SpaceMobile’s Q2 Miss Highlights the Cost of Expansion

Failing to improve upon Q1’s galactic earnings miss, AST SpaceMobile reported Q2 earnings per share (EPS) of -77 cents, well off from analysts’ consensus estimate of -32 cents, with quarterly revenue of $31.52 million also missing the analyst forecast of $34.98 million.

Beyond EPS and revenue, there are other causes for concern. Capital expenditures (CapEx) surged from nearly $257 million to more than $610 million. While that jump isn’t surprising for a company that boasts vertical integration of 95% and is rapidly scaling towards its goal of putting 45 BlueBirds into low Earth orbit by early 2027, a more than 137% increase in CapEx underscores the substantial cash required to build out the constellation.

Adjusted operating expenses showed a more than 205% year-over-year (YOY) increase in engineering services costs, up to $87.28 million in Q2 from $28.59 million in the same quarter a year prior. Total adjusted operating costs surged more than 130% YOY, to over $119 million from $51.7 million.

Management expects Q3 adjusted operating expenses, excluding adjusted cost of revenues, to increase to $105 million to $115 million, while the company’s 2026 revenue plan remains highly dependent on successful satellite launches, gateway deliveries, and contract milestones. AST SpaceMobile has now beaten EPS expectations in just two of the past 10 quarters.

The Silver Lining: Reaffirmed Guidance as Partnerships Keep AST SpaceMobile on Track

AST SpaceMobile’s growing pains are symptomatic of a rapidly scaling company, but the Q2 report was not without its highlights. Management reaffirmed that it is on track to achieve 2026 full-year revenue guidance in the range of $150 million to $200 million, as the D2D total addressable market continues to expand.

In Q2, the company received a preliminary selection for Japan’s J-LEO project, which could provide up to approximately $1 billion in non-dilutive, non-debt government capital, while expanding opportunities in radar, secure government communications, emergency response, IoT, and AI edge computing.

AST SpaceMobile also noted that it now has more than 60 mobile network partnerships in place with companies including telecom giants AT&T (NYSE: T), Verizon Communications (NYSE: VZ), Vodafone Group (NASDAQ: VOD), and Tokyo-based internet services company Rakuten (OTCMKTS: RKUNY). AST also maintains broader strategic relationships with companies including real estate investment trust American Tower (NYSE: AMT), Alphabet (NASDAQ: GOOGL), and the U.S. federal government.

Among those strategic partnerships, the company’s commercial deployment continues to advance, with more than 3 billion subscribers and approximately 50 gateways across 20 markets. Encouragingly, management is targeting the availability of the D2D consumer beta later in 2026.

AST SpaceMobile also reported a revenue backlog of around $1.3 billion and more than $3.7 billion of pro forma cash, cash equivalents, and restricted cash. It also announced three U.S. government contract awards with more than $100 million of funded value expected in 2026 and 2027, while saying that government revenue could become a recurring multibillion-dollar annual opportunity beginning in 2027.

In his earnings call comments, CEO Abel Avellan said that “BlueBird 14 to 16 are undergoing final testing as their manufacturing assembly is nearly completed,” adding that “the recent launch of BlueBird 11 to 13 demonstrated our ability to rapidly and repeatedly build, launch, and deploy the largest phased array in low-Earth orbit using advanced composite material for lighter and even bigger satellites.”

Despite Volatility, Shares Could Be Trading at a Discount

Investors have grown accustomed to AST SpaceMobile’s ups and downs.

Peak to trough and vice versa, the stock has experienced 20 double-digit gains and losses this year alone. AST SpaceMobile currently has a beta of about 2.7, reflecting significantly greater sensitivity to market moves than the broader market.

Still, over the trailing 12 months, the stock has rewarded long-term shareholders with a nearly 50% gain. At the same time, institutional investorshave continued their buying spree, with approximately $2.4 billion of inflows in the past year compared to less than $470 million in outflows.

Investors may also want to continue monitoring the current short interestof more than 19% of the float. For those looking for a potential entry point, ASTS put in its year-to-date low on July 29 and, despite the current slide, remains well above that low. READ THIS STORY ONLINE

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NVIDIA’s Rally Sets Up a Bigger Test Ahead of Earnings

Written by Thomas Hughes

NVIDIA’s (NASDAQ: NVDA) price action sent a signal in the first week of August, and it says this market is ready to move higher.

While hurdles remain, a significant catalyst lies ahead, suggesting the gains could be robust.

The signal is an 11% one-week advance, the largest single-week movement in over a year, confirming support at prior highs.

It reflects a market in acquisition mode with potential for momentum to increase as H2 progresses.

NVIDIA Fires Strong Technical Signal Ahead of Earnings Release

The technical outlook is solid, with only a single hurdle for price action: potential for resistance at the existing all-time high. Other than that, NVIDIA’s early August gain comes with bullish signals in the moving averages, MACD, and stochastic, which align with trend-following movement. Together, they make a strong signal, likely leading to a retest of the critical resistance, if not a higher high, by mid- to late-month, when the catalyst is expected.

More importantly, the move was underpinned by trading volume and supported by analysts who point to much larger gains. Fifty-one out of 53 analysts tracked by MarketBeat rate this stock as a Buy, showing strength across all three key metrics: the number of analysts, the consensus sentiment, and the consensus price target. While revisions slowed in July to a dribble, they reflect firming, with the consensus forecasting more than 30% upside from the critical resistance point and the high-end suggesting NVIDIA’s stock may still double.

Valuation metrics also suggest that NVIDIA’s stock may double with time. Trading at approximately 24x the current-year guidance, NVIDIA has only a slight premium relative to the S&P 500, about 7x to 10x below historical norms, setting the stage for a 50% upside from price-multiple expansion alone. When factoring in the growth trajectory, earnings projections put NVIDIA in the high single digits relative to its earnings as early as 2032, suggesting at least 100% upside is possible without the impact of multiple expansion.

Fiscal Q2 Results Are a Major Catalyst for NVIDIA

And the catalyst? The company’s Q2 fiscal year 2027 earnings report is due in late August. NVIDIA guided for just over $91 billion in net revenue, up more than 95% compared to the past year, and an acceleration sequentially and year-over-year. The likely outcome, the expected outcome, is outperformance and hot guidance, as has been the case for years, which is the risk. Expectations are high, so a solid report may not be enough to catalyze the market into immediate action.

The worst-case scenario is that NVIDIA’s stock price goes nowhere. Tepid market response or not, NVIDIA will report healthy growth, solid margins, and outlook, compounded by its recent investments. They provide a path to near-term growth and profitabilityby securing supply chains, while also providing a path to long-term growth and profitability by securing future supply and technology.

Downside risk is further limited by the company’s cash flow, which enables self-funded investment and accelerated capital returns, and by institutional activity, which suggests they will buy on dips. Although the early Q3 activity reflects some caution, with total activity at a minimum and the balance tilted in favor of distribution, trailing 12-month activity is more robust. It reveals accumulation at approximately a $2-to-$1 pace.

Capital Returns Underpin Broad Market Support for NVIDIA Stock

Capital return is a reason why institutions will buy this stock on dips and help support the price action over time. As exciting as new technology is, cash flow drives institutional investment, and NVIDIA has institutional-quality cash production ability. The AI boom drives billions in quarterly cash flow, sustaining a fortress-like position and improving its capacity for returns despite its heavy investments.

The likely outcome is that NVIDIA sustains high-quality cash flow and cash flow growth in the upcoming years, allowing it to sustain aggressive share buybacks and dividend growth. Repurchases are the greater of the two, amounting to more than $19 billion of the nearly $20 billion in fiscal Q1 2027, resulting in an average reduction of nearly 0.9% compared to the prior year.

Reasons to believe that NVIDIA will outperform its guidance include the Q2 earnings reports from major hyperscalers, neoclouds, and adjacent equipment makers. They reveal cloud spending is still growing, focused on infrastructure buildout, while supply remains constrained. Meanwhile, NVIDIA’s initial Vera Rubin shipments are expected and will likely exceed forecasts. Adjacent hardware and software launches and ramps are also accelerating, providing the much-needed connections and networking for scale-out and scale-up applications.

As it stands, the only thing limiting NVIDIA’s revenue-generating ability is its ability to deliver. The risks are centered on supply chain bottlenecks, such as at Taiwan Semiconductor Solutions (NASDAQ: TSM), which controls the bulk of the AI market and limits the capacity for advanced GPU solutions. READ THIS STORY ONLINE

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Today’s Featured Content: ALERT: Drop these 5 stocks before the market opens tomorrow!(From Weiss Ratings)