We recently compiled a list of the 10 Hot Growth Stocks to Invest in According to Analysts. In this article, we are going to take a look at where HubSpot, Inc. (NYSE:HUBS) stands against the other hot growth stocks.
The big rally in the broader stock market might have ceased, but there are a lot of things to focus on under the surface, says Morningstar. Notably, technology stocks, which were the leading contributors to the big bull market in 2023 and 2024, have seen strong declines in 2025. Elsewhere, other sectors including financial services, basic materials, and healthcare continue to see new investor interest.
Morningstar, while highlighting the comment from Michael Arone (chief investment strategist at State Street Global Advisors), mentioned that non-US markets including China, the UK, and Germany have seen strong rallies. Notably, the market strategists continue to see a subtle transition in leadership. The broader markets have been struggling to find focus due to the uncertainties related to the future. The US Fed rate cuts are not guaranteed this year, while inflation remains sticky. Also, the potential impact of Trump’s economic policy proposals is unknown yet.
Is a Market Rotation on the Horizon?
To provide a brief perspective, when a rotation occurs, the market investors tend to shift their focus from stocks that were critical to a strong trend to other parts of the broader equity market that have not seen much movement. Morningstar believes that there is plenty of evidence that a rotation is underway. Technology stocks, which have seen an increase of over 36% in 2024, are down in 2025. The NASDAQ-100 Technology Sector has seen a decline of ~0.74% on a YTD basis.
The basic materials sector was the worst performing sector in 2024. However, so far in 2025, related stocks have managed to deliver decent gains. Dow Jones U.S. Basic Materials Index increased by over ~6% on the YTD basis. Also, healthcare stocks have grabbed investors’ attention after they returned ~2.7% in 2024, says Morningstar. Dow Jones U.S. Health Care Index returned over 7% on a YTD basis. As per Dan Kemp, Morningstar chief research and investment officer, there seems to be a rotation in terms of valuations.
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UBS Remains Optimistic About S&P 500 in 2025 Despite Challenges
UBS has reiterated the importance of portfolio diversification and hedging in a bid to navigate the market volatility moving forward. Investors are required to consider capital preservation strategies so that they can limit the portfolio losses. Investors looking to build up long-term AI exposure can use structured strategies or “buy the dip” strategy in certain quality AI stocks.
UBS expects 2025 capex from the Big 4 US tech firms to increase by 35% to reach US$302 billion, with the firm seeing strong demand for frontier models. Due to the AI adoption trends fueling monetization, it projects mid-teens returns for global AI stocks this year.
Our Methodology
To list the 10 Hot Growth Stocks to Invest in According to Analysts, we used a screener to shortlist stocks that have gained at least 30% over the past 6 months and that analysts see at least 20% upside to over the next 12 months. Next, we ranked the stocks in ascending order of their average upside potential, as of March 5. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of software developers gathered around a monitor discussing a new CRM platform.
HubSpot, Inc. (NYSE:HUBS)
% Gain Over 6-Month Period: ~31.3%
Average Upside Potential: ~38.0%
Number of Hedge Fund Holders: 73
HubSpot, Inc. (NYSE:HUBS) is engaged in providing a cloud-based customer relationship management (CRM) platform for businesses. Barclays upped the company’s price target to $815 from $725, keeping an “Equal Weight” rating. As per the analyst, the company’s increased Pro and Enterprise tier and multi-hub adoption continue to aid its fiscal 2025 revenue outlook. Elsewhere, analysts at Needham upped their price objective on HubSpot, Inc. (NYSE:HUBS)’s stock to $900 from $730, maintaining a “Buy” rating.
As per the firm’s analysts, HubSpot, Inc. (NYSE:HUBS) remains in a prime position to fuel subscription growth earlier than several of its SaaS counterparts as the broader economic cycle starts to shift. Entering 2025, the company remains focused on strengthening its position as the leading AI-first customer platform for scaling companies. For FY 2025, HubSpot, Inc. (NYSE:HUBS) expects total revenue of $2.985 billion – $2.995 billion, reflecting a rise of 14% YoY on an as-reported basis and 16% in constant currency. The company’s commitment to AI integration continues to act as a standout feature of the current product development efforts. The roll-out of Breeze Intelligence, which happens to be a competitively-priced product which integrates with generative AI and data offerings, highlights HubSpot, Inc. (NYSE:HUBS)’s focus on innovation. This new product can enhance its competitive edge in the broader market.
Overall HUBS ranks 8th on our list of the hot growth stocks to invest in according to analysts. While we acknowledge the potential of HUBS as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than HUBS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.