HubSpot Inc. (HUBS) saw its shares surge 5.22% in intraday trading on Tuesday, outperforming the broader market. The stock's rally was backed by solid trading volume, indicating strong investor interest.

The cloud-based marketing and sales software company's stock price jump can be attributed to a few key factors:

First, HubSpot recently completed the acquisition of Frame AI, an AI-powered conversation intelligence platform. The company plans to integrate Frame AI into its customer AI platform, Breeze, highlighting its efforts to enhance its AI capabilities and better anticipate customer needs through powerful AI solutions.

Additionally, HubSpot is benefiting from robust demand for its cloud-based infrastructure from small and medium enterprises (SMEs). The company has seen healthy net customer additions to its starter edition and pricing optimization, boosting sales in the lower-tier market segment. Updates to its Sales Hub product, including a low-priced Starter tier and improvements to sales engagement tools, have made HubSpot's offerings more affordable for growing sales teams.

Looking ahead, analysts expect HubSpot to report strong quarterly earnings of $2.19 per share, up 24.4% year-over-year, driven by anticipated revenue growth of 15.8% to $673.67 million. The company's growing adoption of inbound applications and favorable earnings and revenue growth expectations likely contributed to investors' bullish sentiment.