HubSpot (HUBS) delivered its third straight quarter of stabilizing growth as artificial intelligence tools and seat-based pricing start to gain momentum, Morgan Stanley said in a note Thursday.

The firm said Q3 revenue rose 21% with strong upmarket traction and multi-hub adoption continuing to drive growth.

Morgan Stanley said "core fundamentals remain solid" with 43% of professional plus customers now using three or more hubs.

"Expanding cross-hub penetration enhances retention, reduces displacement risk, and strengthens value delivery as agentic insights compound across departments and personas," the firm said.

Analysts expect the seat-based pricing model to become a key growth driver as customers on the new model add seats faster.

Morgan Stanley also noted early adopters of HubSpot's artificial intelligence platforms are already exceeding credit allotments, driving the company's consumption-based revenue model as usage grows.

Morgan Stanley reiterated its overweight rating on HubSpot and lowered its price target to $640 from $747.

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