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Investing.com -- Bernstein raised its rating on HubSpot to Outperform from Market-Perform, saying easing macroeconomic risks and a pullback in the stock’s valuation have created a more favorable setup for the software company.
The brokerage, which set a $606 price target, said concerns over HubSpot’s exposure to small and mid-sized businesses had weighed on its stance earlier this year, when it initiated coverage with a neutral view.
But it now expects growth to accelerate in the second half of 2025 as leading indicators improve.
Bernstein highlighted four reasons for the upgrade: stabilizing macro conditions, a more attractive risk-reward profile following multiple compression, a constructive outlook for artificial intelligence as a potential growth driver rather than a threat, and a strong setup for the back half of the year.
HubSpot, which provides sales, marketing and customer service tools to smaller firms, is seen benefiting from businesses consolidating multiple software providers into single platforms.
Bernstein also noted the company’s AI strategy, which includes embedding digital assistants and building connectors to services such as ChatGPT and Claude, could help drive adoption and monetization without alienating customers.
“Valuation has come down meaningfully in the last six months,” Bernstein wrote, adding that investor concerns around small business exposure and AI disruption have not materially altered the company’s growth trajectory.
The firm’s analyst day later on Tuesday is expected to give more detail on data management and second-half prospects.
“With many macro issues abating or at least stabilizing and HubSpot’s valuation having come down, we believe the risk / reward trade-off has tilted to the upside.”