Intel vs. HubSpot: Which AI-Driven Tech Stock Has More Upside?

Intel Corporation INTC and HubSpot, Inc. HUBS are two premier tech firms that are leaning heavily into AI (artificial intelligence) for sustenance. Intel, reportedly the world’s largest semiconductor company and primary supplier of microprocessors and chipsets, is gradually reducing its dependence on the PC-centric business by moving into data-centric businesses, such as AI and autonomous driving. The foundry operating model is a key component of the company's strategy and is designed to reshape operational dynamics and drive greater transparency, accountability and focus on costs and efficiency.

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 has facilitated the development of more powerful, advanced and accurate AI capabilities. The adoption of advanced AI tools, such as AI assistance, AI agents, AI insights and ChatSpot, across its entire product suites and customer platform is driving more value to customers.

The Case for Intel

Intel has launched AI chips for data centers and PCs. This marks one of the largest architectural shifts for the company in 40 years. The strategic decision is primarily aimed at gaining a firmer footing in the expansive AI sector, spanning cloud and enterprise servers to networks, volume clients and ubiquitous edge environments, in tune with the evolving market dynamics. The company has unveiled Intel Core Ultra featuring the neural processing unit, which enables power-efficient AI acceleration with 2.5x better power efficiency than the previous generation. With superior graphics processing unit (GPU) and CPU capabilities, it is capable of speeding up AI solutions. The company also introduced the new vPro platform with Intel Core Ultra processor that delivers enhanced power efficiency. With dedicated AI acceleration capability spread across the central processing unit, GPU and the new neural processing unit, it will unlock an endless new wave of AI experiences across all apps. 

Intel's innovative AI solutions are set to benefit the broader semiconductor ecosystem by driving down costs, improving performance and fostering an open, scalable AI environment. The company has witnessed healthy traction in AI PCs, which have taken the market by storm and remain firmly on track to ship more than 100 million by the end of 2025. Intel Xeon platforms have reportedly set the benchmark in 5G cloud-native core with substantial performance and power efficiency improvements, additional power-saving capabilities and easy-to-deploy software. This has triggered healthy demand trends from major telecom equipment manufacturers and independent software vendors to optimize and unleash proven power savings for a more sustainable future.

However, Intel derives a significant part of its revenues from China. As Washington tightens restrictions on high-tech exports to China, Beijing has intensified its push for self-sufficiency in critical industries. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers. The company is also lagging behind in the GPU and AI front compared to peers such as NVIDIA Corporation NVDA and Advanced Micro Devices, Inc. AMD. Leading technology companies are reportedly piling up NVIDIA’s GPUs to build clusters of computers for their AI work, leading to exponential revenue growth.

The Case for HubSpot

HubSpot has integrated HubSpot AI across its entire product suites and customer platform, enabling users to leverage AI features at no additional cost. Pricing optimization and the transition to a seat pricing model are expected to drive customer growth. The seat pricing model lowers the barrier for customers to get started with HubSpot and mitigates pricing friction for upgrades. The model intends to encourage more clients to adopt HubSpot services and expand their usage over time. It is anticipated to lead to healthier customer cohorts and is expected to contribute positively to the company's growth over time.

The company is embedding generative AI into its CRM, marketing and sales automation tools. The buyout of Frame AI, an AI-powered conversation intelligence platform, has accelerated its ability to unify structured and unstructured data across the customer journey at scale. This will empower go-to-market teams to transform conversations into actionable intelligence. 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. 

Although the introduction of $20 per month marketing starter pack will help HubSpot to attract new customers, the low-priced pack will likely dent the average sale revenue per customer growth rate at least in the near term. Despite having limited features, the pack can lead to cannibalization of the premium products. Moreover, growing investments in data center infrastructure, sales & marketing and research & development continue to strain margins. Despite the increasing top line, mounting losses do not augur well for investor confidence. Reduced spend from small and medium-sized businesses amid a challenging business environment and macroeconomic headwinds remains a concern.

How Do Zacks Estimates Compare for INTC & HUBS?

The Zacks Consensus Estimate for Intel’s 2025 sales implies a year-over-year decline of 1.7%, while that of EPS indicates growth of 215.4%. The EPS estimates have been trending southward (down 46.4%) on average over the past 60 days.

The Zacks Consensus Estimate for HubSpot’s fiscal 2025 sales suggests year-over-year growth of 17.4%, while that for EPS implies a rise of 16.9%. The EPS estimates have been trending northward (up 1.5%) over the past 60 days.

Price Performance & Valuation of INTC & HUBS

Over the past year, Intel has gained 17.2% compared with the industry’s growth of 37.8%. HubSpot has lost 8.6% over the same period.

Intel looks more attractive than HubSpot from a valuation standpoint. Going by the price/sales ratio, Intel’s shares currently trade at 1.93 forward sales, significantly lower than 7.08 for HubSpot.

INTC or HUBS: Which is a Better Pick?

Both Intel and HubSpot carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both companies expect their earnings to improve in 2025. Long-term earnings growth expectations for HUBS and INTC are 19.5% and 7.1%, respectively. HubSpot is a bit expensive in terms of valuation metrics compared to Intel. However, Intel expects a decline in revenues, contrary to that of HubSpot. Consequently, with a slight edge, HubSpot seems to be a better investment option at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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