Salesforce vs. HubSpot: Which CRM Stock Is the Smarter Buy Now?

Core Insights - Salesforce, Inc. and HubSpot, Inc. are leading players in the CRM software market, targeting different segments; Salesforce focuses on large enterprises while HubSpot caters to small and mid-sized businesses [1][2] Salesforce Overview - Salesforce remains a dominant force in the CRM market, surpassing competitors like Microsoft, Oracle, and SAP, and is transitioning to a broader enterprise software provider with a focus on AI, data, and collaboration [3] - The introduction of Einstein GPT in 2023 has integrated generative AI into Salesforce's platform, enhancing automation, decision-making, and customer experience [4] - The launch of Agentforce, which has achieved $100 million in annualized revenues within two quarters, demonstrates Salesforce's innovation momentum, with over 4,000 customers utilizing it [5] - Despite its strengths, Salesforce is experiencing a slowdown in sales growth, with Q1 fiscal 2026 revenues increasing by only 7.7% year-over-year and non-GAAP EPS growing by 5.7% [6] - Analysts predict mid-to-high single-digit revenue growth for Salesforce in fiscal 2026 and 2027, with low double-digit growth in non-GAAP EPS [7] HubSpot Overview - HubSpot reported a robust 15.7% revenue growth in Q1, significantly outpacing Salesforce, and is focusing on AI tools and mid-market strategies to enhance growth forecasts through 2026 [8][11] - The company is heavily investing in AI features, workflow automation, and advanced reporting to attract larger mid-market customers, positioning itself for significant expansion as SMBs digitize operations [12] - HubSpot's App Marketplace facilitates customer-centric solutions, enabling seamless integration for businesses, which is likely to create more opportunities as companies adopt a digital-first approach [13] - Analysts forecast mid-teen percentage growth for HubSpot's revenues and non-GAAP EPS for 2025 and 2026, indicating a faster growth trajectory compared to Salesforce [14] Valuation Comparison - HubSpot trades at 8.75 times forward sales, while Salesforce trades at 5.84 times, reflecting HubSpot's higher growth momentum justifying its premium valuation [16] - Salesforce's lower valuation is attributed to its slowing sales growth and macroeconomic challenges [16] Investment Conclusion - While both companies have strong business models, Salesforce is facing growth challenges, whereas HubSpot is maintaining steady growth, making HubSpot a more attractive investment choice despite its higher valuation [18] - HubSpot currently holds a Zacks Rank 1 (Strong Buy), while Salesforce has a Zacks Rank 3 (Hold), indicating a preference for HubSpot among investors [19]