Microsoft Faces AI Demand Questions as GitLab Posts Eighth Straight Beat

2 weeks ago 23

William Temple

Thu, December 4, 2025 astatine 11:38 AM CST 4 min read

GitLab (GTLB) bushed Q3 estimates with 25% gross maturation and operating borderline reaching 18% from antagonistic a twelvemonth ago.
GitLab insiders sold heavy with Director Matthew Jacobson offloading $45M successful September and the banal present trading astatine $42.
Microsoft (MSFT) chopped income quotas for Azure AI products aft reps struggled to deed maturation targets contempt spending $19.4B connected capex past quarter.
If you’re reasoning astir retiring oregon cognize idiosyncratic who is, determination are 3 speedy questions causing galore Americans to recognize they tin discontinue earlier than expected. instrumentality 5 minutes to learn much here

GitLab (NASDAQ: GTLB) and Microsoft (NASDAQ: MSFT) some reported caller quarters with contrasting stories. GitLab bushed estimates connected December 2 with 25% gross maturation and expanding margins. Microsoft reported coagulated September results but faces questions astir whether endeavor AI request justifies its monolithic infrastructure spending.

GitLab delivered $244.4 cardinal successful gross for Q3 FY2026, beating the $239.3 cardinal estimate. Non-GAAP EPS came successful astatine $0.25 versus $0.20 expected. This marks the eighth consecutive 4th of net beats, with an mean astonishment of 56% implicit 2 years. Operating borderline reached 18% non-GAAP, up from antagonistic territory a twelvemonth ago. Free currency travel deed $27.2 cardinal compared to antagonistic $177 cardinal successful the anterior twelvemonth quarter.

Customers spending implicit $100,000 annually grew 23% twelvemonth implicit year. Dollar-based nett retention sits astatine 119%, meaning existing customers are expanding usage. CEO Bill Staples said "More codification means much of a request for GitLab" connected the net call, pointing to the company's presumption arsenic AI drives much bundle development.

Microsoft reported $77.7 cardinal successful Q1 FY2026 revenue, up 18.4% and up of the $75.4 cardinal estimate. Azure grew 40%, driving the Intelligent Cloud conception to $30.9 billion. Operating borderline reached 48.9%. The institution generated $45.1 cardinal successful operating currency flow, up 31.8%.

But a December 2 study from The Information changed the narrative. According to Reddit idiosyncratic u/Illustrious_Lie_954, "Microsoft shares dipped a spot contiguous aft a study suggested the institution chopped income quotas for immoderate of its AI bundle offerings." The station noted that "many income reps successful Azure's AI portion struggled to deed past year's maturation numbers, particularly astir the Foundry product." The station asked whether this signals "growing pains, oregon an aboriginal motion that AI adoption wrong ample companies is slower than the communicative suggests."