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RGA Investment Advisors highlights GitLab as AI tailwind grows
The investor letter cites steep volatility in AI bottleneck data center stocks and notes GitLab trades at sub-4x EV/sales and over 5% free cash flow yield.
RGA Investment Advisors, an investment management company, released its second-quarter 2026 investor letter focused on how incorporating AI into investment strategies is reshaping market dynamics, with particular attention to the “AI Bottleneck 40,” a group of stocks tied to data center infrastructure, according to Yahoo Finance.
The letter says these AI infrastructure names initially moved closely with the S&P, but by mid-2025 they began diverging and outperforming the index, with realized volatility rates nearing 60%. It also emphasizes the need to continuously monitor the trend and adjust strategy as conditions change.
In the letter, RGA Investment Advisors singled out GitLab Inc. (NASDAQ:GTLB), saying it supports the software development lifecycle, including DevSecOps and git management for enterprises. RGA links AI to stronger demand for GitLab’s offerings, while also flagging concerns that a shift in how large enterprises use AI could reduce the number of technical employees, creating a headwind given its traditional per-seat pricing model, Yahoo Finance reported.
The article also notes market figures around GitLab, including a close of $42.03 per share on August 24, 2026, a $7.099 billion market capitalization, a 27.5% one-month return, and a 3.98% decline over the past 52 weeks. RGA’s letter argues valuation is compelling for a company it says is still growing its top line, citing sub-4x EV/sales, around 20x EV/EBITDA, and a free cash flow yield over 5%.
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