Investment Rating - The industry investment rating is "Positive" (maintained) [3] Core Insights - The AI application vendors in the US stock market achieved a total revenue of $23.599 billion in Q1 2025, with a year-over-year growth of 12.1%, and an average revenue growth rate of 20.37% [1][11] - The IT service vendors in the US stock market reported a total revenue of $37.612 billion in Q1 2025, reflecting a year-over-year increase of 5.59% [1][34] - The willingness of enterprises to invest in AI is rapidly growing, with expectations for global enterprise software and IT service spending to reach $1.25 trillion and $1.73 trillion in 2025, respectively [2][56] Summary by Sections 1. Industry Perspective: AI Deployment Demand Growth Opens SaaS and IT Service Market Space - AI application vendors in the US stock market showed significant improvement in profitability and operational efficiency in Q1 2025, with a combined net profit of $4.774 billion, a year-over-year increase of 55.76% [1][13] - The average operating profit margin for these vendors was 15.81%, up by 1.61 percentage points year-over-year [1][17] - The combined RPO (Remaining Performance Obligation) for AI application vendors reached $132.266 billion in Q1 2025, a year-over-year growth of 16.48% [1][26] 2. Tracking Overseas AI Application Vendors - Salesforce reported a revenue of $9.829 billion in Q1 2026, with a year-over-year growth of 7.62% [2][67] - Adobe's AI-first related product orders exceeded $125 million in Q1 2025, with expectations to double by the end of FY25 [2][33] - HubSpot's Copilot user base grew to over 660,000 in Q1 2025, reflecting a significant increase from 270,000 in Q4 2024 [2][33] 3. Recommendations for Focused Targets - Suggested targets include companies involved in Agent applications such as iFlytek and Focus Technology, as well as AI vertical applications like Kingsoft Office and Foxit Software [3]

Group 1 - HubSpot (HUBS) closed at $609.40, with a 1.1% gain over the past four weeks, and a mean price target of $763.91 indicating a 25.4% upside potential [1] - The mean estimate consists of 32 short-term price targets with a standard deviation of $66.58, where the lowest estimate is $645 (5.8% increase) and the highest is $930 (52.6% increase) [2] - Analysts show strong agreement on HUBS's ability to report better earnings, with a positive trend in earnings estimate revisions indicating potential upside [4][11] Group 2 - The Zacks Consensus Estimate for HUBS has increased by 49.9% over the past month, with 13 estimates going higher and no negative revisions [12] - HUBS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be a reliable indicator, the direction of price movement it implies appears to be a good guide for potential gains [13]

Core Viewpoint - HubSpot, Inc. (NYSE: HUBS) is positioned for attractive growth over the next two years, driven by a shift to seat-based pricing and AI integration [1] Company Analysis - The investment approach focuses on understanding core business economics, including competitive moat, unit economics, reinvestment runway, and management quality [1] - The emphasis is on long-term free cash flow generation and shareholder value creation [1] Investment Strategy - The analysis is rooted in fundamental research, particularly in sectors with strong secular tailwinds [1] - The goal is to identify businesses with the potential to scale and unlock significant terminal value [1] Author's Background - The author has 10 years of experience in investment banking and is currently managing personal funds, with initial capital from friends and family [1] - The motivation for sharing insights on Seeking Alpha is to provide analytical and accessible investment analysis [1]

Financial Data and Key Metrics Changes - The meeting confirmed a quorum with 49,627,056 shares represented out of 52,636,286 shares entitled to vote, indicating strong shareholder engagement [5] - The results of the voting showed that all proposals presented at the meeting were ratified or approved by stockholders, reflecting positive shareholder sentiment [19] Business Line Data and Key Metrics Changes - Specific financial data and metrics for different business lines were not disclosed in the meeting [2][3] Market Data and Key Metrics Changes - No specific market data or metrics were provided during the meeting [2][3] Company Strategy and Development Direction and Industry Competition - The board of directors proposed amendments to declassify the board and eliminate supermajority voting provisions, indicating a shift towards more shareholder-friendly governance practices [7][17] - The discussion around the simple majority voting proposal suggests a focus on enhancing corporate governance and responsiveness to shareholder interests [14][18] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting [2][3] Other Important Information - The meeting included a proposal from a shareholder advocating for a simple majority voting standard, which was supported by the board, highlighting active shareholder participation in governance [12][14] - The independent auditors, PwC, were confirmed for the fiscal year ending 12/31/2025, ensuring continued oversight of financial practices [7][17] Summary of Q&A Session - There were no specific Q&A sessions recorded in the meeting, as the focus was primarily on voting on proposals [2][3]

Core Viewpoint - HubSpot Inc. (HUBS) shares have dropped over 20% in the last six months due to Alphabet Inc. (GOOGL) abandoning its acquisition plans, which would have strengthened HubSpot's position in the CRM software market and cloud computing sector [1][2] Group 1: Growth Drivers - HubSpot is focusing on collecting and enriching customer data from various sources, with the acquisition of Clearbit enhancing its data capabilities and AI integration [3] - The company's inbound marketing and sales applications facilitate customer acquisition and retention through traditional marketing methods, with a strategic priority on delivering a world-class front-office platform [4] - HubSpot has significant potential for cross-selling products to its existing customer base, supported by the One HubSpot initiative and a customer-centric App Marketplace [5] Group 2: Market Opportunities - HubSpot targets mid-market businesses, which are largely underpenetrated, presenting substantial growth opportunities [7] - The company is rapidly expanding its geographic presence, currently operating in 12 international locations and serving customers in over 120 countries, indicating strong long-term growth prospects [7] Group 3: Financial Performance - HubSpot has a long-term earnings growth expectation of 18.4% and has delivered an average earnings surprise of 10.7% over the past four quarters [8]

Market Overview - The AI-driven bull run of 2023 and 2024 has faced significant challenges in 2025 due to the Fed's uncertainty regarding rate cuts, recession fears, and competition from low-cost Chinese AI platforms [1] - Concerns over the Trump administration's tariff and trade policies have negatively impacted investor confidence in risky assets, particularly in the technology sector [2] Company Analysis: Arista Networks Inc. (ANET) - Arista Networks is positioned well with a robust network architecture for cloud and AI networking, focusing on proactive products, zero-touch automation, and predictive operations [6] - The company's EOS Smart AI Suite and Arista AVA enhance AI job monitoring and network security, catering to the growing demand for high-performance switching products [7][8] - ANET has an expected revenue growth rate of 18.7% and earnings growth rate of 12.8% for the current year, with a 4% improvement in earnings estimates over the last 30 days [9] - The average price target for ANET indicates a potential increase of 19.3% from the last closing price of $92.79, with a maximum upside of 40.1% [10] Company Analysis: Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, providing a comprehensive platform for customer service and sales functions [11] - The company has seen growth from the adoption of AI tools in call center services, with the introduction of its Intelligent CX Platform powered by Five9 Genius AI [13] - FIVN has an expected revenue growth rate of 9.6% and earnings growth rate of 11.7% for the current year, with a 6.6% improvement in earnings estimates over the last 30 days [14] - The average price target for FIVN suggests a potential increase of 35% from the last closing price of $27.11, indicating a maximum upside of 139.8% [15] Company Analysis: HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform, experiencing steady adoption from enterprise customers and benefiting from pricing optimization [16] - The integration of HubSpot AI features is enhancing customer value, with a focus on lowering barriers for new customers [17] - HUBS has an expected revenue growth rate of 15.4% and earnings growth rate of 14.9% for the current year, with a 2.1% improvement in earnings estimates over the last 30 days [18] - The average price target for HUBS indicates a potential increase of 23.9% from the last closing price of $616.92, with a maximum upside of 50.7% [19]

Market Overview - The AI-driven bull run of 2023 and 2024 faced significant challenges in 2025 due to overstretched valuations, stock inflation, weak economic data, geopolitical conflicts, and concerns over the Trump administration's trade policies, impacting confidence in equities [1] - The technology sector, particularly AI-focused stocks, has been the most affected, but current low valuations present investment opportunities [2] Recommended AI Stocks - Five Internet-based AI stocks with favorable Zacks Rank recommended for purchase on the dip include Arista Networks Inc. (ANET), Fastly Inc. (FSLY), Five9 Inc. (FIVN), HubSpot Inc. (HUBS), and Twilio Inc. (TWLO), all carrying a Zacks Rank 2 (Buy) [3] Arista Networks Inc. (ANET) - Arista Networks is positioned well with a robust network architecture for cloud and AI networking, focusing on proactive products, zero-touch automation, and predictive operations [6] - The company’s AI suite enhances job monitoring and performance issue resolution, with expected revenue and earnings growth rates of 18.7% and 12.8% for the current year, respectively [8] - ANET is currently trading at a 31.6% discount from its 52-week high price [8] Fastly Inc. (FSLY) - Fastly provides cloud computing infrastructure and recently launched Fastly AI Accelerator, optimizing generative AI applications [10][11] - The company has expected revenue and earnings growth rates of 8.7% and 16.7% for 2025, respectively, and is trading at a 40.5% discount from its 52-week high price [12] Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, benefiting from the growing adoption of AI tools [13][15] - The expected revenue and earnings growth rates for the current year are 9.6% and 11.7%, respectively, with a 47.6% discount from its 52-week high price [16] HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform and is experiencing steady adoption from enterprise customers, driven by its AI features [17][18] - The expected revenue and earnings growth rates for the current year are 15.4% and 14.9%, respectively, with a 30.2% discount from its 52-week high price [19] Twilio Inc. (TWLO) - Twilio focuses on generative AI offerings and has launched Customer AI technology to enhance customer engagement [20][21] - The expected revenue and earnings growth rates for the current year are 7.8% and 22.6%, respectively, with a 25.3% discount from its 52-week high price [24]

Core Insights - The article highlights the significance of Big Data in enhancing business decision-making, risk management, and operational efficiency through advanced analytics and AI technologies [3][4]. Company Summaries Confluent Inc. (CFLT) - Confluent operates a data streaming platform, providing managed cloud-native SaaS and self-managed software solutions [7]. - Expected revenue and earnings growth rates are 19% and 32.4%, respectively, for the current year, with a 20.5% improvement in earnings estimates over the past 30 days [8]. - The short-term average price target indicates a potential increase of 28.9% from the last closing price of $21.05, with a maximum upside of 71% [9]. Blackbaud Inc. (BLKB) - Blackbaud offers cloud software and services, achieving solid execution of strategic goals with organic revenue growth and stock buybacks [10][11]. - Expected revenue and earnings growth rates are -3.1% and 17.9%, respectively, with an 8.4% improvement in earnings estimates over the past 30 days [12]. - The short-term average price target suggests a 10.7% increase from the last closing price of $62.12, indicating a maximum upside of 36.8% [12]. Sprout Social Inc. (SPT) - Sprout Social provides a web-based social media management platform, offering AI-powered solutions for various social media functions [13][14]. - Expected revenue and earnings growth rates are 11.3% and 20.6%, respectively, with a 10.3% improvement in earnings estimates over the past 30 days [14]. - The short-term average price target indicates a potential increase of 30.7% from the last closing price of $21.55, with a maximum upside of 94.9% [15]. HubSpot Inc. (HUBS) - HubSpot delivers a cloud-based customer relationship management platform, experiencing steady adoption and integration of AI features [16][17]. - Expected revenue and earnings growth rates are 15.4% and over 100%, respectively, with a 49% improvement in earnings estimates over the past 30 days [18]. - The short-term average price target suggests a 19% increase from the last closing price of $621.25, indicating a maximum upside of 49.7% [18]. Teradata Corp. (TDC) - Teradata provides a hybrid cloud analytics platform, benefiting from strong cloud ARR growth and strategic partnerships with major tech companies [19][20]. - Expected revenue and earnings growth rates are -6.5% and -2.1%, respectively, with unchanged earnings estimates over the past 30 days [20]. - The short-term average price target indicates an 18.7% increase from the last closing price of $21.82, with a maximum upside of 60.4% [21].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies covered. Core Insights - The report highlights the global distribution of enterprise software spending, indicating that the US accounts for approximately 56% of sales, with Western Europe at 23% in CY24, showing minimal change from CY20 [15] - The exposure of software and cloud companies to China is relatively low, with the report suggesting that tariffs or actions on software will not have a significant impact [14][12] - The report expresses concerns about deglobalization, noting that regions like the EU may attempt to promote local software industries through regulations and tariffs [14][12] Summary by Sections Global Exposure of Enterprise Software - Enterprise software spending has remained stable globally from CY20 to CY24, with most companies generating more revenue outside North America [2] - The US market is the largest revenue driver for most companies, except for SAP, which has similar revenue exposure in Western Europe and North America [14][12] Microsoft and Oracle Exposure - Microsoft has a 22% exposure to Western Europe and 11% to Asia/Pacific, with China accounting for only 1.8% of Azure revenue [22][28] - Oracle's global exposure mirrors that of enterprise software, with 21% in Western Europe and 10% in Asia/Pacific [33][35] SAP and Adobe Global Presence - SAP has equal revenue exposure to the US and Western Europe, with 37% in North America and 37% in Western Europe [40][41] - Adobe has become more global over the past four years, with a revenue mix of 56% in North America and 23% in Western Europe by CY24 [42][45] Salesforce and Workday International Growth - Salesforce has increased its international revenue percentage from CY20 to CY24, now at 64% in North America and 20% in Western Europe [46][48] - Workday remains predominantly North American, generating 77% of its revenue in North America in CY24, although it is working to expand its international presence [51][54]

Core Viewpoint - HubSpot, Inc. reported strong first-quarter 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates [1] Financial Performance - The company recorded a GAAP net loss of $21.8 million or a loss of $0.42 per share, compared to a net income of $5.9 million or $0.12 per share in the same quarter last year [3] - Non-GAAP net income was $95.9 million or $1.78 per share, an increase from $89.1 million or $1.68 per share year over year, beating the Zacks Consensus Estimate by $0.04 [3] - Quarterly revenues rose to $714.1 million from $617.4 million year over year, surpassing the Zacks Consensus Estimate of $699 million [3] Customer Growth - HubSpot added over 10,000 net new customers during the quarter, bringing the total customer count to 258,258, a 19% increase year over year [4] - Subscription revenues increased to $698.7 million from $603.8 million, up 16% year over year, exceeding the Zacks Consensus Estimate of $659.33 million [4] Profitability Metrics - Gross profit for the quarter was $599 million, up from $522.3 million in the prior year [6] - Non-GAAP operating income improved to $100.3 million from $92.6 million, with respective margins of 14% and 15% [6] Cash Flow and Liquidity - The company generated $161.6 million in cash from operating activities, compared to $127.1 million in the same quarter last year [7] - As of March 31, 2025, HubSpot had $625 million in cash and cash equivalents, along with $368.9 million in convertible senior notes [7] Future Outlook - For Q2 2025, HubSpot forecasts revenues between $738 million and $740 million, representing a 16% increase [8] - The company expects non-GAAP net income per share in the range of $2.10 to $2.12, with anticipated non-GAAP operating income of $124 million to $125 million, indicating a 17% operating profit margin [8] - For the full year 2025, management estimates revenues between $3.036 billion and $3.044 billion, also a 16% year-over-year increase [8][9]