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Cloudflare and HubSpot both beat on Q1 earnings — but with AI threats looming, it wasn’t enough to satisfy investors

Traders continue to “sell software now, ask questions later.”

David Crowther

HubSpot and Cloudflare, two enterprise software companies that do completely different things — one a marketing and CRM firm, the other a cybersecurity play — are under pressure for the exact same reason this morning.

While both beat on headline earnings in Q1, both failed to successfully dispel the notion that AI is a threat to their future growth, margins, or very existence, with Cloudflare falling more than 15% in early trading Friday and HubSpot faring even worse, down 20% at the time of writing.

For Cloudflare, in Q1 2026, the company reported:

  • Revenue of $640 million, 2.7% ahead of consensus estimates.

  • Adjusted earnings per share of $0.25, 7.5% ahead of the consensus.

For HubSpot, in the first three months of its fiscal year, it managed:

  • Revenue of $881 million, 2% north of Wall Street estimates.

  • Adjusted earnings per share of $2.72, a 10% beat versus the consensus.

Strong results aside, as I noted two weeks ago:

“Whether you make dashboards, CRMs, design tools, or run an HR platform, if it’s built on code, the market thinks there’s a decent chance that at least one of the four C’s — Claude, Codex, Copilot, or Cursor — is going to blow a hole in your business model. Or, to be more accurate: someone using one of those coding tools will.”

So, any hint of AI weakness in your quarterly earnings is jumped on by the market as evidence that your future is under threat.

For Cloudflare, the company’s Q2 forecast, coupled with a massive restructuring, seems to be its undoing, with revenue for the quarter projected at around $664.5 million — that’s a hair under the consensus estimate of $666 million. At the same time, the company announced a huge set of layoffs, cutting about 1,100 jobs, or ~20% of its workforce, as the company moves to adopt AI agents and tools.

Ironically, other firms announcing a slimmed-down workforce because of AI have seen their share prices pop. However, when people think AI is going to kill your business, it seems markets won’t give you the same treatment for jumping into bed with it.

For HubSpot, it was a similar story: a Q2 revenue forecast of $897.5 million at the midpoint is about $2 million and change below consensus estimates, per Bloomberg. That’s not a lot, but even a gentle flattening of its growth trajectory seems to be enough to drive downgrades from Wall Street; analysts at Cantor Fitzgerald and William Blair both downgraded the stock to “Neutral / Market Perform” from “Overweight / Outperform,” while JPMorgan cut its price target to $250 from $325.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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