Atlassian (TEAM) reported stronger fiscal Q4 cloud growth and full-year cloud guidance that strengthen its growth outlook and position the company as an artificial intelligence winner, Morgan Stanley said in a Friday note.

Cloud revenue accelerated 31% year over year, driven by paid seat expansion in existing customers and cross-selling of higher-value collections, the firm said.

Fiscal 2027 cloud revenue guidance of 25.5% also exceeded expectations and more than offset anticipated weakness in Data Center revenue, analysts noted.

Morgan Stanley said the results address concerns that slowing developer headcount would weigh on Atlassian's long-term growth.

The firm also pointed to continued momentum in Jira and Confluence, growing enterprise adoption and AI monetization through the company's Teamwork Graph.

Morgan Stanley raised its price target on Atlassian to $180 from $120 and maintained its Overweight rating.

Shares of Atlassian were 31% higher in Friday trading.

Price: 144.78, Change: +34.61, Percent Change: +31.42