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HubSpot's Q1 Reinforces Growth Stability Despite Near-Term AI Pressure, Morgan Stanley Says

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HubSpot's (HUBS) Q1 results reinforced the company's growth stability but AI pricing and packaging changes will likely pressure its net new annual recurring revenue and temper acceleration expectations, Morgan Stanley said in a Friday research note.

The investment firm said while the company's Q1 results were "solid overall," the strategic shifts are likely to drive "incremental investor consternation" around the company's growth trajectory.

The note said, however, that while these actions are expected to be disruptive in the near term, they should ultimately support AI adoption and become a more durable growth lever over time.

HubSpot reported Q1 revenue of $881 million, up 23% year over year as reported and above the consensus estimate of $863 million. However, despite the beat, fiscal 2026 guidance was raised by $9 million at the midpoint, implying a "slight guide down" for the balance of the year.

The company still expects net new annual recurring revenue growth to outpace constant-currency revenue growth for the full year, particularly in H2, according to the note.

Morgan Stanley lowered HubSpot's price target to $350 from $405, with an overweight rating.

Price: $190.53, Change: $-53.19, Percent Change: -21.82%

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