Prediction: This Glorious Growth Stock Will Double in the Second Half of 2026

Atlassian (NASDAQ: TEAM) developed a suite of software products designed to boost productivity and streamline workflows for its enterprise customers. Unfortunately, Wall Street has shunned software stocks over the past 12 months on fears that artificial intelligence (AI) could disrupt their business models. Atlassian stock subsequently plunged to $57 in April, marking a 71% decline from its 52-week high of $220.

Some analysts believe AI will shrink the global workforce, which will hurt software companies that charge customers on a per-user basis. Other analysts think tools such as Anthropic's Claude Code will allow the average business to build its own version of popular software products, eliminating the need for vendors such as Atlassian.

However, I think those fears are overblown, because Atlassian is using AI to enhance its existing products, and it's having a lot of success. In fact, the company's revenue growth accelerated during the first quarter of 2026, which poked a big hole in the bearish argument. I've been buying Atlassian stock myself over the past few months, and here's why I predict it will double in the second half of this year.

Image source: Getty Images.

AI is helping, not hindering, Atlassian's business

Atlassian's flagship products include Jira, which helps software developers manage their projects, and Confluence, which is like a digital town square whereby employees in a given organization can discuss work and share documents. In 2024, Atlassian launched an AI platform called Rovo, which enhances Jira and Confluence with a growing list of new capabilities.

Rovo can serve as a coding assistant, so it's a great addition to a product like Jira. It also offers a powerful search tool that can immediately locate information from across the entire organization, even if it's stored in a software platform outside the Atlassian ecosystem. Then there's Rovo Service, which supports employees by planning and executing resolutions to their specific problems.

Since Atlassian has more than 350,000 customers, it has mountains of enterprise data it can use to train Rovo, which will differentiate it from many of the generic AI assistants available across the industry. Adoption is already soaring; during the first quarter, Atlassian said the annual recurring revenue (ARR) it earned from Rovo customers grew twice as fast as the ARR from non-Rovo customers.

Atlassian is coming off an excellent quarter

Atlassian delivered $1.8 billion in total revenue during the first quarter, topping Wall Street's estimate of $1.7 billion. That represented 32% growth from the year-ago period, which was a big acceleration from the 23% growth the company delivered three months earlier in the prior quarter.

In fact, it was Atlassian's fastest quarterly growth rate since the final period of 2022, more than three years ago. In other words, this company's demise was greatly exaggerated.

One key reason enterprises aren't rushing to abandon Atlassian is that the company offers more than just software. It provides the technical support, infrastructure, and security required to deploy tools such as Jira and Confluence, which is only financially viable to maintain at scale. Therefore, even if an organization could build its own versions of those software products using AI coding tools, that doesn't mean they could deploy them effectively.

Atlassian also alleviated another one of Wall Street's concerns recently by launching a new pricing model called Flex. It allows customers to set a fixed budget that they can allocate to any Atlassian products during their contract period. It's value-based, so they pay only for what they use, eliminating the need to predict how many seats (or users) they might have over a given time period.

Why Atlassian stock could double by the end of 2026

Following its steep decline, Atlassian stock is trading at a price-to-sales (P/S) ratio of just 3.3, which is a hefty discount to its three-year average of 10.5, and significantly below its 2025 peak of 17.5.

TEAM PS Ratio data by YCharts

That means even if Atlassian stock doubles over the next six months, its price-to-sales ratio would climb to just 6.6, which would still be way below its three-year average. And that assumes the company doesn't grow its revenue at all -- in reality, the stock looks even cheaper on a forward basis.

In summary, I think the sell-off in Atlassian stock is overdone, and it would only recover a fraction of its recent losses with a return of 100% from here. If the company continues to deliver blockbuster quarterly results, I think the stock could produce an even better performance.

Anthony Di Pizio has positions in Atlassian. The Motley Fool has positions in and recommends Atlassian. The Motley Fool has a disclosure policy.