diff --git a/backend/routes/atlas.js b/backend/routes/atlas.js
index ac73437..0417e6a 100644
--- a/backend/routes/atlas.js
+++ b/backend/routes/atlas.js
@@ -291,28 +291,35 @@ function createAtlasRouter() {
                     if (result.status >= 200 && result.status < 300) {
                         let allPlans = [];
                         let activePlans = [];
+                        let atlasRecognizesHost = false;
                         try {
                             const parsed = JSON.parse(result.body);
                             if (parsed && typeof parsed === 'object' && !Array.isArray(parsed)) {
-                                activePlans = Array.isArray(parsed.active) ? parsed.active : [];
-                                const inactive = Array.isArray(parsed.inactive) ? parsed.inactive : [];
-                                allPlans = [...activePlans, ...inactive];
+                                // Check for "not found" error responses that come back as 200
+                                if (parsed.error || parsed.message?.includes('not found')) {
+                                    atlasRecognizesHost = false;
+                                } else {
+                                    atlasRecognizesHost = true;
+                                    activePlans = Array.isArray(parsed.active) ? parsed.active : [];
+                                    const inactive = Array.isArray(parsed.inactive) ? parsed.inactive : [];
+                                    allPlans = [...activePlans, ...inactive];
+                                }
                             } else if (Array.isArray(parsed)) {
+                                atlasRecognizesHost = true;
                                 allPlans = parsed;
                                 activePlans = parsed;
                             }
                         } catch (e) {
                             allPlans = [];
                             activePlans = [];
+                            atlasRecognizesHost = false;
                         }
 
                         const planCount = activePlans.length;
                         const hasActionPlan = planCount > 0;
-                        // Atlas "knows" this host if:
-                        // 1. It returned any plans (active or inactive), OR
-                        // 2. The host belongs to a managed BU (these should always show the badge)
-                        // Non-managed BU hosts with empty responses don't get a badge.
-                        const atlasKnown = allPlans.length > 0 || isManagedHost;
+                        // Atlas knows this host if it returned a valid structured response
+                        // (not "not found" or error). This determines whether the badge renders.
+                        const atlasKnown = atlasRecognizesHost;
 
                         try {
                             if (!hasActionPlan) {