Elastic shares surge as Investor Day highlights AI growth and margin upside

Investing.com -- Elastic shares have jumped more than 10% in premarket trading after the company raised its revenue and margin outlook during its Investor Day, with analysts from Barclays and RBC Capital praising the balance between product innovation and conservative guidance.

Barclays said Elastic struck the “right balance between product excitement and conservative outlook,” highlighting how the company is making ongoing progress to productize its offering across observability, security, and search while “adding genAI capabilities to drive future differentiation.” 

The bank said Elastic’s new financial framework around growth and free cash flow margin “does not feel by any means to be a stretch target, which leaves the potential for further upside.”

Elastic raised its full-year revenue forecast to between $1.697 billion and $1.703 billion, up from $1.679 billion to $1.689 billion, and increased its non-GAAP operating margin target to 16.25%. Q2 midpoint revenue guidance was raised to $418 million compared to $416 million previously.

Barclays also noted a new $500 million share repurchase program, with the company planning to use more than half of it in fiscal 2026.

RBC Capital said it came away from the event “feeling good about their positioning in an increasingly agentic world,” pointing to Elastic’s ambition to become “an important component of the GenAI/agentic tech stack.” 

The firm highlighted new product launches, including Agent Builder and Inference Service, as well as a raised fiscal 2026 guidance.

RBC added that Elastic’s medium-term targets of “20%+ revenue growth and 20%+ NG OM and adjusted FCF” reinforce confidence in “the company’s opportunity for GenAI to drive incremental growth.” 

Both firms maintained their Outperform/Overweight ratings on the stock, citing a strong setup for sustained expansion.