Is HubSpot’s AI Pivot a buying opportunity?

Shares of HubSpot Inc NYSE: HUBS they are trading around $200, having recovered from the $174 low they set following the May 7 earnings report. The software stock is still down more than 75% from last year’s high and has shed nearly half of its value since January alone. This kind of price action means that HubSpot has become known as one of the most brutal victims of the widespread SaaS sales of the past year.

In further context of how dire the chart looks, HubSpot is back to trading at the same levels it was at in 2019, despite the company continuing to deliver record quarterly revenue. That’s the fundamental tension facing HubSpot and potential investors today. The stock price and chart tell the story of a business in dire straits, but the fundamentals tell a very different story.

Last week’s earnings report saw HubSpot once again beat expectations, delivering 23% year-over-year revenue growth, raising its full-year guidance, and hitting its 2027 operating goal a full year ahead of schedule.

With that said, is there an argument to be made that the market is horribly wrong, and we are actually looking at a significant buying opportunity?

Early Negative Reaction to Salaries

There’s no getting away from the fact that the initial reaction to the May 7 earnings results was negative, with stocks trading nearly 30% off their previous earnings levels and setting new multi-year lows. Despite the headline hit, investors were understandably nervous when management admitted the quarter had gotten off to a slow start, but the broader context is important.

HubSpot is in the midst of moving to an outcome-based pricing model for its AI agents, which naturally lengthens sales cycles as sales teams are retrained and customers test new tools. If there was a short-term disruption at the beginning of the quarter, that was deliberate and strategic, not a sign of demand divergence.

But Its AI Pivot Is Beginning to Gain Traction

One of the most important things to consider about HubSpot’s opportunity right now is how its AI monetization efforts are already showing up in data, not as a talking point for executives. According to last week’s report, the total AI credits used by HubSpot customers jumped nearly 70% in the last quarter, suggesting meaningful acquisitions and purchases by its customers.

There’s also HubSpot’s ongoing shift to results-based pricing to consider, and this is shaping up to be one of its most interesting moves. Outcomes-based pricing is something that many, if not most, SaaS companies are striving to achieve right now, as the old seat-based pricing model was rendered obsolete overnight by the advent of AI-powered vibe code.

Although the conflict around making this pivot is real, finally including its costs in the calculated results supports two major things: first, it aligns HubSpot’s revenue directly with the customer value, which will better reflect its customer retention and expansion ambitions. And second, it positions HubSpot to succeed as a SaaS business in the AI ​​world. Those of its peers who fail to make this pivot will find it very difficult to stay competitive in the coming months.

Another Signal The Market May Be Lost

Beyond the basics, there are other data points worth highlighting that lend themselves to the bulls thesis. According to MarketBeat’s Insider Trades tool, this quarter marks the first time in a long time that HubSpot insiders bought stock rather than simply sold it, with the CTO and CEO raking in more than $2.5 million in combined purchases.

It is not unreasonable to wonder why people who know the business better have chosen this time, at multi-year lows, to spend their money. That is a signal that is hard to ignore.

Bullish Analysts and Attractive Ratings

Many from the analyst community have come to the same conclusion. Canaccord Genuity, Sanford Bernstein, and Goldman Sachs all reiterated buy or equal ratings in recent weeks, with a new price target of $382, implying a potential upside of more than 80% from current levels. Others, like BNP Paribas, have taken a cautiously neutral stance, but the weight of belief in the bullish price tag alone makes for an attractive risk/reward profile.

Stock testing is also important. HubSpot’s latest PE ratio may sound high at around 110, but considering it started the year above 400, there’s an argument that it’s actually quite low now. When you add in the fact that this is the printing business’s quarterly earnings, while its AI pivot is gaining momentum, and insiders are starting to buy the stock again, it becomes very easy to argue that the stock’s fall has created a comeback opportunity that might be too good to miss.

Before you consider HubSpot, you’ll want to hear this.

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