Elastic (ESTC) is well-positioned to benefit from enterprise artificial intelligence adoption, particularly as AI applications move into large-scale production, RBC Capital Markets said in a Thursday note.

The brokerage said the company's mid-term targets of over 20% total revenue growth, over 20% non-GAAP operating margins, and free cash flow margin remain on track.

RBC said Elastic differentiates itself from competitors through its self-managed and flexible deployment offerings, positioning it close to both structured and unstructured data.

Management highlighted current remaining performance obligations as a key directional indicator, noting growth accelerated to 15% constant currency in the latest quarter, which could support future revenue growth, according to the note.

"We do not believe the war in Iran will have a material impact on results," RBC said, noting that while the company has some exposure to the Middle East, these markets are relatively immaterial.

RBC maintained an outperform rating on the stock, but lowered its price target to $70 from $80.

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