HubSpot: a tech stock set to tumble

US tech stocks have had a fantastic couple of years. But this year is unlikely to be so bullish for high-fliers that can’t turn big profits.

Dharmesh Shah and Brian Halligan, the founders of HubSpot
Dharmesh Shah and Brian Halligan, founders of HubSpot
(Image credit: © Dina Rudick/The Boston Globe via Getty Images)

The past two years has been great for American technology stocks. They have benefitted from a huge amount of investor optimism as the Covid-19 pandemic pushes a lot of activity online. Money printing by the US Federal Reserve has kept interest rates at near-zero levels, allowing them to raise plenty of capital on the basis of future profitability, even if they are currently losing large sums of money. However, with the pandemic starting to wane, and the Fed preparing to tighten policy, this party seems to be coming to an end. Some of the more bubbly stocks are starting to experience large falls, including HubSpot (NYSE: HUBS).

This firm sells a range of online-marketing and customer-management services over the internet. Its share price soared more than fivefold from $162 at the start of 2020 to a peak of $840 at the end of last November, as a large number of small businesses were forced to expand their online operations as a result of the pandemic. However, HubSpot’s price has been in freefall over the last six weeks, declining by around 40% to $509 – levels not seen since last May.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri