Can HubSpot Regain its Mojo After Alphabet's Buyout Snub?
Shares of HubSpot Inc. HUBS have declined more than 20% in the past six months, following Alphabet Inc.'s GOOGL decision to shelve its buyout plans. From Alphabet's perspective, acquiring HubSpot would not only have bolstered its presence in the burgeoning customer relationship management (CRM) software market but also provided a significant boost to its cloud computing business, intensifying competition with industry giants like Microsoft and Amazon. Additionally, the acquisition could have enhanced competition in the marketing and sales software sector, countering the dominance of players like Salesforce and Microsoft.
Image Source: Zacks Investment Research
For HubSpot, an acquisition by Alphabet could have offered access to greater resources and technological capabilities, enabling it to further innovate and expand its market reach. However, with the news of the deal falling flat, HUBS' shares have taken quite a beating. Nevertheless, HubSpot's flexible business model and solid cash flow could prove to be a game-changer in the long run. Earnings estimates for the current and next fiscal year have increased 9% and 5.1%, respectively, since May 2024. Let us delve a little deeper into the stock's inherent growth potential.
HubSpot is increasingly focusing on collecting and enriching customers with extensive, unified data pulled from website visits, marketing e-mails, sales calls and more. The acquisition of Clearbit, a B2B data provider for marketing intelligence, has further accelerated its vision. The integration of Clearbit premier information pool with HubSpot AI will facilitate the development of more powerful, advanced and accurate AI capabilities.HubSpot's inbound marketing and sales applications enable businesses to easily reach, acquire and retain customers through traditional marketing tools like cold calls, print advertisements and e-mail. The company's strategic priority is to deliver a world-class front-office platform by investing in anchor hubs and innovating new emerging hubs. The growing adoption of inbound applications has helped develop the marketing agency partner network. Management's focus on integrating generative AI to drive innovation and add more value to customers is likely to reap long-term benefits. The company has significant scope in cross-selling its products to the existing customer base. The One HubSpot initiative is a key growth driver. In addition, HubSpot's App Marketplace offers a customer-centric solution by making it simple for companies to find and seamlessly connect the integrations to grow their businesses. As companies prioritize a digital-first approach, it is likely to create more opportunities for developers to build new integrations that support every stage of the customer journey.
HubSpot primarily targets mid-market businesses, comprising companies with 10 to 2,000 employees. This market is mostly underpenetrated, which presents a significant growth opportunity for the company. Moreover, HubSpot is expanding its geographic footprint rapidly and currently has international offices in 12 different locations worldwide with a customer base in more than 120 countries. This augurs well for the long-term growth of the company.It has a long-term earnings growth expectation of 18.4% and delivered an earnings surprise of 10.7%, on average, in the trailing four quarters.
HubSpot currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.InterDigital, Inc. IDCC carries a Zacks Rank # 2 at present. It has a long-term growth expectation of 15%. InterDigital is a pioneer in advanced mobile technologies, enabling wireless communications and capabilities. The company designs and develops a whole range of advanced technology solutions for use in digital cellular as well as wireless 3G, 4G, and IEEE 802-related products and networks. InterDigital delivered a trailing four-quarter earnings surprise of 160.2%, on average.Ubiquiti Inc. UI carries a Zacks Rank #2 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. Ubiquiti's excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company's effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
HubSpot, Inc. (HUBS) : Free Stock Analysis Report
Ubiquiti Inc. (UI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
5 hours ago
- Yahoo
Why Meta Platforms Stock Jumped 18% in May
Meta jumped on a strong earnings report and a thaw in U.S. and China tensions. The social media giant may also be benefiting from trouble at Alphabet. Barring a recession, the stock looks well positioned for more gains. 10 stocks we like better than Meta Platforms › Shares of Meta Platforms (NASDAQ: META) were moving higher last month after the social media giant jumped on a better-than-expected earnings report, and the stock gained again in the second week of May on news of a detente in the trade war between the U.S. and China. According to data from S&P Global Market Intelligence, the stock finished the month up 18%. As you can see from the chart below, the stock jumped early in the month following its earnings report and tacked on gains from there. After sliding in April on concerns around the trade war, Meta delivered a solid rebound thanks to impressive first-quarter results and hopes that the impact of the trade war would be more modest than previously expected. Meta stock gained 4.2% on May 1 and 4.4% the following day after its Q1 earnings report came in above expectations. Revenue in Q1 rose 16% to $42.3 billion, ahead of estimates at $41.4 billion. The company reported growth in users, ad impressions, and average price per ad, driving the strong growth in revenue, and its margins continued to improve, lifting its earnings per share (EPS) up 37% to $6.43, which easily beat the consensus at $5.22. Meta's guidance was also promising as the company forecast revenue of $42.5 billion to $45.5 billion in Q2 and lowered its full-year expense guidance by $1 billion. The other significant event lifting the stock was the broader surge in the market on May 12 after the U.S. and China agreed to temporarily lower tariff rates. Meta, which is seen as a macroeconomically sensitive stock due to its dependence on digital advertising, gained 8% on May 12 on that news, and it closed out the month 1% higher as it traded mostly sideways over the remainder of May. Another issue that may have impacted the stock last month is pressure on rival Alphabet, which has been accused of operating a monopoly in two different businesses. Last month, the stock fell on news that Apple was considering offering AI search engines like Perplexity on its devices as an alternative to Google. Meta should benefit from any weakness at Alphabet as the two compete for digital advertising spending and in AI. While a weakening economy would present a challenge to the company, based on its Q2 guidance and the strength of Meta AI, the stock looks well positioned to keep gaining. Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. The Motley Fool has a disclosure policy. Why Meta Platforms Stock Jumped 18% in May was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 hours ago
- Yahoo
5 Brilliant Stocks to Buy in June
Nvidia and Taiwan Semiconductor are still benefiting from the AI race. Alphabet and Adobe are beaten down due to fears of AI replacing them. Amazon investors should be focused on cloud computing, not commerce. 10 stocks we like better than Nvidia › As the calendar flips to June and we have nearly reached the halfway point of 2025, stocks are nearly flat for the year despite the turmoil in the market. As of the time of writing, the S&P 500 is basically flat for the year. Although the landscape has shifted since 2025 began, stock prices are generally the same. That may worry some investors, but I'm focused on the long term, and it still looks bright for many companies. If you shift your mindset from five months to five years, all five of these stocks look incredibly attractive, which is why I think they're solid buys for June. Nvidia (NASDAQ: NVDA) is a leading artificial intelligence (AI) stock, providing graphics processing units (GPUs) widely used in training and running AI models. However, we haven't come close to the computing capacity needed to run an AI-first business approach across the entire economy, which is why Nvidia cites third-party estimates that data center capital expenditures will rise from $400 billion in 2024 to $1 trillion by 2028. That's huge growth, and the company will be a massive beneficiary from that trend because it gets the majority of its revenue from GPUs specific to data centers. The company crushed it during its 2026 first quarter (ending April 27), with revenue rising 69%. While some headwinds are brewing with its China business, Nvidia still offers a compelling growth case that makes me want to purchase more shares. Taiwan Semiconductor Manufacturing (NYSE: TSM) is an even more neutral way to play the AI race, as nearly all high-tech companies use TSMC (as its known for short) as their chip foundry. Its business model is to offer the most advanced chip production available to attract clients that want to have their chips fabricated. Because it isn't marketing its own chips to its clients, it removes the conflict of interest facing other chip foundries. Because it's one of the most widely used foundries in the world, it has phenomenal vision into the future, because chip orders are often placed years in advance. Over the next five years, management expects AI-related revenue to have a 45% compound annual growth rate (CAGR), and overall revenue to rise at nearly a 20% CAGR. That's impressive growth over five years, and the stock can still be purchased for around 21 times forward earnings, which is less than the S&P 500 trades at (22.1 times forward earnings). That's an incredible deal for a company expected to outgrow the market, making Taiwan Semiconductor Manufacturing a no-brainer buy in June. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is even cheaper than TSMC, at a mere 18 times forward earnings. That's well below the S&P 500, and even further behind its big tech peers. There is a lot of pessimism surrounding Alphabet's stock, including AI disruption and a potential breakup forced by the U.S. government. This has caused the stock to drop and have a less-than-market multiple, but I think that's a mistake. The company already entered the AI race and is offering AI-powered search and AI overviews to bridge the gap between traditional search and a full generative AI experience. And we're years away from learning the outcome of its various court cases. As a result, I think the fear concerning Alphabet's stock is overblown, and I think it's an excellent value play right now. Adobe (NASDAQ: ADBE) faces the same AI-induced fears as Alphabet does. Investors are worried that images created by generative AI could steal market share from Adobe. But most of these image-creation engines lack the control that a product like Adobe provides. Furthermore, its Firefly -- its own generative AI software -- dovetails nicely into its existing product line. Adobe hasn't seen a ton of disruption yet, and its revenue is still rising at a steady pace. The stock trades around 20 times forward earnings. That's a cheap price tag, especially when you consider the pace at which the company is repurchasing shares, which will cause its earnings per share (EPS) to rise much faster than revenue. This makes Adobe a great value pick for June. If you're patient, the stock will reward shareholders with market-beating performance. Lastly, Amazon (NASDAQ: AMZN) has many investors worried about how tariffs will impact its e-commerce business, which is a reasonable fear. However, they need to understand that the majority of the company's profit doesn't come from its commerce divisions; it comes from Amazon Web Services (AWS). AWS is Amazon's cloud computing wing, and it accounted for only 19% of revenue in the first quarter. However, because its operating margin is superior to the commerce side of the business, it accounted for 63% of total operating profits. As AWS goes, so will Amazon's stock, since it is the profit driver. Cloud computing benefits from two trends: AI and the general migration to the cloud. AWS is slated to grow rapidly over the next few years, which will push company profits higher because it accounts for the majority of the profits. With the market concerned about how tariffs will affect Amazon's commerce business, I'm using its weakness to buy shares. I'm looking at it as more of a cloud computing play than a commerce one. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Adobe, Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Adobe, Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. 5 Brilliant Stocks to Buy in June was originally published by The Motley Fool
Yahoo
10 hours ago
- Yahoo
Alphabet stock could fall as much as 25% in 'black swan event' if judge orders Google Chrome divestiture
Alphabet (GOOG, GOOGL) stock could drop between 15% and 25% if US District Judge Amit Mehta orders Google to sell off its Chrome browser, Barclays analysts wrote in a note to investors Monday. In August 2024, Google lost a landmark antitrust trial against the US Department of Justice. Judge Mehta found the tech giant guilty of monopolizing the search engine market — specifically, the markets for "general search" and "general search text" ads, which are ones that appear at the top of the search results page, Yahoo Finance's Alexis Keenan reported. Last Friday, Google and the Department of Justice wrapped up closing arguments in the remedies phase of the case. The Department of Justice argued that Mehta should force Google to divest its web browser, Chrome, and share its search data with rivals as well as ban its exclusivity agreements that secure Google as the default search engine on mobile devices and browsers, Keenan and Yahoo Finance's Dan Howley reported. Barclays analyst Ross Sandler wrote in a Monday note that 'the probability of a Chrome divestiture, while low, has increased in our view,' following the closing arguments, adding that 'the most likely candidates' to buy Chrome would be 'well funded AI companies like OpenAI, Anthropic or perhaps Perplexity.' Sandler said such an outcome would be 'a major blow' to Google, given that Chrome has 4 billion users and represents 35% of Google's search revenue. 'This would be a major development, a black swan event for GOOGL shares,' he said. 'Shares would obviously trade off significantly if this were to play out as no investors we speak to are thinking this remedy plays out.' Sandler said a Chrome divestiture would not only cause Alphabet stock to tumble as much as 25% but would also result in a potential 30% hit to Alphabet's earnings per share. 'The reality is we don't know what the court is going to decide on remedies, we listened to the entire day of closing arguments and there were certainly times where we felt a lot worse than we did prior, and other times where we felt better (in terms of GOOGL stock price impact),' Sandler said. He holds an Overweight rating on the stock. Mehta is expected to decide on a remedy in the case — and the fate of Google's search empire — in August. Google said Saturday that it will appeal the case. Separately on Monday, Alphabet said it agreed to spend $500 million to change its compliance structure in order to settle a case with shareholders accusing the company of antitrust violations. Alphabet stock fell 1.5% on Monday, and shares are down 10.6% year to date. Read more about "Magnificent Seven" stock moves and today's market action. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
