Oppenheimer flags overstated data center outlook, sees solid Q2 for Atlassian

Oppenheimer analyst Ittai Kidron expects Atlassian (TEAM) to report solid Q2 results, slightly ahead of consensus, with in-line Q3 guidance. However, the firm believes FY27 data center revenue growth expectations are overstated and don’t account for faster data center-to-Cloud migration, a lower data center user base, and upfront revenue recognition at data center renewals. Oppenheimer models FY27 DC revenue growth at down 0.7% vs. consensus’ up 7.9%. Although there’s migration uncertainty, the firm’s checks suggest a stable demand and competitive environment, and increased sales focus on enterprise engagement. While the shares have been caught in the SaaS/AI vortex, Oppenheimer would still wait for the migration framework/DC outlook to reset before buying the shares. The firm has an Outperform rating on the shares with a price target of $275.