What Happened?
Shares of customer platform provider HubSpot (NYSE: HUBS) jumped 2.6% in the afternoon session after investment firm Cantor Fitzgerald reiterated its "Overweight" rating and maintained its $775 price target on the company's shares. In its note, the firm described the software company as a "premier software asset" that traded at historically low profitability multiples. The vote of confidence followed a period where the stock had fallen 14% in the previous week and was trading near its 52-week low. Cantor Fitzgerald's decision reflected its continued belief in the company's market position and future growth potential.
After the initial pop the shares cooled down to $452.75, up 1.7% from previous close.
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What Is The Market Telling Us
HubSpot’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 7.2% on the news that OpenAI announced internal software applications that could potentially compete with existing Software-as-a-Service (SaaS) offerings.
The news sparked concerns across the sector, as OpenAI revealed internally developed tools for sales, inbound marketing, and customer support—core areas for HubSpot. According to TD Cowen analyst Derrick Wood, the announcement has "re-fueled the debate that SaaS is at risk of being displaced by DIY solutions on top of LLMs." The potential for OpenAI to enter the applications market with its own AI-native solutions triggered a broader sell-off among enterprise software stocks. Despite the negative sentiment, Wells Fargo initiated coverage on HubSpot with an "Overweight" rating and a price target of $685, signaling confidence in the company's long-term prospects.
HubSpot is down 35.1% since the beginning of the year, and at $452.75 per share, it is trading 44.8% below its 52-week high of $819.71 from February 2025. Investors who bought $1,000 worth of HubSpot’s shares 5 years ago would now be looking at an investment worth $1,564.
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