Here’s Why HubSpot (HUBS) Detracted from U.S. Focus Growth Equity

TimesSquare Capital Management, an equity investment management company, released its “U.S. Focus Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, equities saw double-digit returns as global economic activity expanded. Growth indexes outperformed the value counterparts in the quarter. The global risk factors like Beta, Momentum, and Residual Volatility were highly rewarded, while Earnings Quality, Value, and Growth were detracted. Further, in U.S. small and mid-cap growth indexes, better returns came from stocks with either high valuations, negative earnings, or low returns on equity. Against this backdrop, the strategy returned 11.79% (gross) and 11.56% (net) compared to an 18.20% return for the Russell Midcap Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, TimesSquare Capital U.S. Focus Growth Strategy highlighted stocks such as HubSpot, Inc. (NYSE:HUBS). HubSpot, Inc. (NYSE:HUBS) offers a cloud-based customer relationship management (CRM) platform for businesses. The one-month return of HubSpot, Inc. (NYSE:HUBS) was 13.79%, and its shares lost 0.69% of their value over the last 52 weeks. On September 10, 2025, HubSpot, Inc. (NYSE:HUBS) stock closed at $489.18 per share, with a market capitalization of $25.776 billion.

TimesSquare Capital U.S. Focus Growth Strategy  stated the following regarding HubSpot, Inc. (NYSE:HUBS) in its second quarter 2025 investor letter:

“Detracting -2% from the strategy was HubSpot, Inc. (NYSE:HUBS), which provides a cloud-based marketing, sales, and client service platform for businesses. The company’s revenues and earnings edged ahead of expectations, though not by as large a margin as typical. Management did lift its guidance for 2025, though noted it was driven by better foreign exchange than by better fundamentals.”

Analyst Explains Catalysts for ‘Significant’ Revenue Upside for HubSpot (HUBS)

HubSpot, Inc. (NYSE:HUBS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held HubSpot, Inc. (NYSE:HUBS) at the end of the second quarter, which was 61 in the previous quarter. HubSpot, Inc. (NYSE:HUBS) reported solid results in the second quarter with revenue growing 18% year-over-year in constant currency. While we acknowledge the risk and potential HubSpot, Inc. (NYSE:HUBS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HubSpot, Inc. (NYSE:HUBS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered HubSpot, Inc. (NYSE:HUBS) and shared the list of best strong growth stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.