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Investing.com - HubSpot (NYSE:HUBS) shares fell 10% following OpenAI’s announcement of internal software applications that could potentially compete with existing SaaS offerings. The news sparked concerns across the SaaS sector, with several companies showing significant weakness according to InvestingPro data.
OpenAI revealed several internally developed tools across front office, middle office, and back office software categories, including sales enablement, inbound marketing assistance, customer support, product analytics, and finance applications. The company plans to showcase more solutions at its upcoming DevDay on October 6.
The news triggered a broader sell-off across enterprise software stocks, with marketing technology companies experiencing the steepest declines. Klaviyo (NYSE:KVYO) dropped 12%, Braze (NASDAQ:BRZE) fell 11%, and DocuSign (NASDAQ:DOCU) declined 12%. DocuSign, which maintains impressive gross margins of nearly 80% and has grown revenue by 8.3% over the last twelve months, has seen its shares fall over 14% in the past week.
TD Cowen analyst Derrick Wood noted that while these are currently internal tools with no confirmed plans for market release, the announcement has "re-fueled the debate that SaaS is at risk of being displaced by DIY solutions on top of LLMs" and suggests OpenAI might push into the applications layer with AI-native solutions.
Wood believes the market reaction for some companies may be overblown, particularly for Klaviyo and Braze, as OpenAI’s marketing tools target inbound B2B marketing rather than the outbound email and mobile marketing where these companies specialize. According to InvestingPro’s Fair Value analysis, DocuSign appears undervalued at current levels, with additional insights available in the comprehensive Pro Research Report covering 1,400+ top stocks.
In other recent news, DocuSign has reported significant developments that are catching the attention of investors. The company announced that its Intelligent Agreement Management (IAM) platform has received FedRAMP Moderate authorization, allowing federal agencies to adopt its digital solutions while adhering to stringent security standards. This authorization is expected to facilitate the digitization and automation of agreement workflows within government entities. Additionally, DocuSign and CLEAR have launched a new identity verification solution, integrating biometric technology into digital agreements to tackle identity fraud concerns.
In terms of financial analysis, Piper Sandler has raised its price target for DocuSign to $90, highlighting strong second-quarter results driven by platform innovations and strategic changes. Meanwhile, JPMorgan increased its price target to $80, recognizing DocuSign’s leadership in the contract-lifecycle management market. Needham has maintained a Hold rating on the stock, noting improved execution under CEO Allan Thygesen, with better-than-expected performance of the company’s new IAM solution. These developments reflect DocuSign’s ongoing efforts to enhance its product offerings and market position.
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