Atlassian (NASDAQ:TEAM) just dropped a monster quarter, sending its stock soaring 18% in the morning and hitting a fresh 52-week high. The enterprise software giant smashed Wall Street estimates, pulling in $1.29 billion in revenue21% higher than last year and well ahead of the $1.24 billion analysts had expected. The real story? AI. Subscription revenue surged 30%, driven by the company's AI-powered cloud tools, including its Rovo AI assistant, which is rapidly becoming a must-have for enterprise customers. With cloud revenue now forecasted to grow 26.5% this year, Atlassian is proving it's not just keeping up with the AI raceit's leading the charge.

CEO Mike Cannon-Brookes didn't hold back, saying AI is supercharging collaboration and efficiency across the board. CFO Joe Binz pointed to strong enterprise sales execution as the key reason behind the company's outperformance, with both cloud and data center revenue exceeding expectations. As a result, Atlassian hiked its fiscal 2025 revenue growth forecast to 18.5%-19%, up from its previous 16.5%-17% projection. The demand for AI-driven productivity tools is accelerating, and Atlassian is perfectly positioned to capitalize.

Morgan Stanley's Keith Weiss sees the company joining the upper echelon of AI-driven software firms, with Atlassian Intelligence now serving over a million monthly active users. Shares are already up nearly 30% this year, and with a solid pipeline of AI innovations, investors are betting that this momentum is just getting started.