HubSpot (HubSpot (HUBS)) is having a rough Friday. The stock cratered 21% to trade near $192, scraping its 52-week low of $187.45. The trigger? A weaker-than-expected outlook and a rare double-downgrade from BofA Securities that slashed the price target from $300 to $180. Ouch.
The core issue is HubSpot's big bet on AI agents. The company is fundamentally reshaping its sales strategy, asking reps to pitch AI agents instead of traditional software. It also rolled out a new outcomes-based pricing model for those agents in April. That's a lot of change at once.
BofA analyst Matt Bullock downgraded HubSpot from Buy to Underperform, warning that the simultaneous shifts in pricing, packaging, and go-to-market execution create serious operational risk. He called the long-term strategy sensible but said the near-term turbulence could be brutal.
"Investor sentiment will likely remain pressured until HubSpot proves the strategy can gain traction, which could take several quarters," Bullock said.
The first-quarter results already showed cracks. New net annual recurring revenue growth slightly trailed constant-currency revenue growth, and Bullock expects a similar pattern in the second quarter. Why? The company spent a week in April retraining its sales teams on the new AI-first approach. That's a week of lost selling time.
Bullock cut his 2026 revenue estimates by $18 million to align with the lower end of management's guidance. He had previously been $25 million above company forecasts. He also noted that the guidance still assumes growth acceleration in the second half of 2026, but he now expects a more modest "beat-and-maintain" performance rather than the "beat-and-raise" pattern investors had hoped for.
The bigger worry is whether customers are ready for AI agents. Bullock questioned whether enterprise demand is strong enough to support widespread adoption, and he warned that the pivot could lengthen sales cycles and weaken the steady momentum HubSpot's core business has historically enjoyed.
For now, HubSpot is in a tough spot. The stock is down 21% on the day, and the path to recovery is uncertain. Investors will be watching closely to see if the AI bet pays off — or if it just creates more headaches.
