GitLab stock was surging on Wednesday-but investors should be wary of chasing that rally, even after a second-quarter earnings beat.

Shares of the coding platform jumped 21% to $54.53 ahead of the opening bell. Futures tracking the S&P 500 were 0.1% lower as Wall Street continued to worry about the recent run-up in bond yields.

The eye-popping gains came after GitLab's earnings and revenue both came in well above analysts' expectations. But the rally may not last, with the stock already up 46% over the three months through Tuesday's close.

GitLab's platform allows software developers to write, test, and launch programs from a shared space. That means it faces fierce competition from the likes of Microsoft's GitHub, Anthropic's Claude Code, and Cursor, which SpaceX just bought for $60 billion.

"One quarter does not resolve long-term questions about AI-driven disruption in the dev tools market," William Blair analyst Jason Ader wrote in a research note as he upgraded the stock to Market Perform.

Ader did note that GitLab had reported record gross booking numbers and was seeing strong early demand for its flexible subscription model, Flex.

The company reported adjusted net income of 25 cents a share for the quarter, as revenue jumped 21% from a year ago to $286.3 million. Analysts were expecting earnings of 18 cents a share on revenue of $273.1 million, according to a FactSet poll.