Compounders are businesses that steadily grow earnings year after year, often because they operate with scalable models and can reinvest profits at high rates of return.
In AI, much of the attention so far has been on the infrastructure layer, which are the companies building the foundational models and cutting edge technology to power the AI revolution. Think Taiwan Semiconductors, ASML, and NVIDIA.
In today’s market, some of the most exciting opportunities we’re seeing come from the application layer, where AI is embedded directly into the software people and businesses already use every day. These are companies that already have strong distribution and high switching costs that are now weaving AI directly into their products.
Rather than competing to train massive models, these businesses can weave AI into existing workflows, allowing them to unlock new revenue streams and strengthen their competitive moats.
This article highlights five compounders that Wall Street may be overlooking, plus one bonus pick, all of which could benefit meaningfully as AI becomes part of how work gets done.
Each of these stocks is a high-quality business with a history of strong performance and the potential for AI to accelerate their compounding in the years ahead.
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Stock #1: HubSpot (HUBS)
HubSpot (HUBS) has built a strong position as the go-to platform for small and mid-sized businesses looking to manage their marketing, sales, and customer service in one place. Its all-in-one approach lets companies run websites, capture leads, automate emails, and analyze customer data without juggling multiple tools.
Where HubSpot can win on the AI application layer is execution inside day-to-day jobs. AI drafts and personalizes content, scores and routes leads, summarizes calls and emails, recommends next best actions, and triggers automated follow-ups or support resolutions without hopping tools.
Because HubSpot controls both the data context and the action surface, its models can learn from closed-loop outcomes and continuously improve. Packaging these capabilities inside higher-tier hubs and seats, plus add-ons like conversation intelligence and agents, gives paths for clear ARPU lift with minimal friction for existing customers.
That combination of a subscription engine, strong market position, and increasing AI adoption makes HUBS a compelling compounder. With margins expanding and revenue growing at a healthy clip, Wall Street may be underestimating how much upside remains as HubSpot turns into a true AI-driven customer platform.
Valuation Model Summary
Based on mid-case assumptions, HubSpot stock could be worth about $1,248 by the end of 2029, implying a 166.7% total return from today’s price of ~$468. That equates to roughly 25.3% annualized returns over the next 4.3 years.
What Happens If Things Go Better or Worse?
The model incorporates scenarios based on SMB digital adoption, marketing automation demand, and AI copilots inside go-to-market workflows.
This is how returns might look depending on HubSpot’s performance:
- Low Case: SMB spending slows and AI-native competitors pressure pricing → 17.6% annual returns
- Mid Case: HubSpot steadily expands adoption as AI copilots enhance marketing, sales, and service efficiency → 25.3% annual returns
- High Case: HubSpot becomes the AI-driven customer platform for SMBs, unlocking higher ARPU and stronger seat growth → 32.7% annual returns
HubSpot’s control of both customer data and workflows positions it well, though its upside depends on successful AI monetization.
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Stock #2: Adobe (ADBE)
Adobe is the standard layer for creating, managing, and activating content across Creative Cloud, Document Cloud, and Experience Cloud. Adobe’s file formats and data graphs (layers in PSDs, vectors in Illustrator, PDF structure, asset libraries, and engagement signals) could give it a unique advantage as AI tools become more integrated into creative workflows.
Where Adobe may stand out on the AI application layer is in workflow-native copilots that act with deep awareness of layout, layers, and brand rules.
- Firefly could make content creation faster and more accessible through generative fill, text effects, and instant variations inside Photoshop, Illustrator, and Express.
- Acrobat AI Assistant might expand what’s possible with documents by summarizing and querying directly from the PDF graph.
- In Experience Cloud, AI could help enterprises generate on-brand copy, test creative, and personalize journeys more efficiently.
If these tools continue to gain adoption, Adobe might shift from being just a set of creative tools to being a platform that delivers content outcomes. Firefly credits, GenStudio modules, and AI assistants could drive higher ARPU, while faster content velocity and stronger ROI might keep enterprises more tightly locked into the ecosystem.
If AI-native workflows become the norm, Adobe seems well positioned to capture more of the marketing and document workflow spend.
Valuation Model Summary
Based on mid-case assumptions, Adobe stock could be worth about $602 by late 2029, implying a 65.8% total return from today’s price of ~$363. That equates to roughly 12.6% annualized returns over the next 4.3 years.
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What Happens If Things Go Better or Worse?
The model adjusts for various scenarios depending on digital ad trends, cloud momentum, and based on demand for creative software, adoption of AI tools like Firefly, and enterprise marketing spend.
This is how returns might look depending on Adobe’s performance:
- Low Case: Growth slows as competition intensifies from AI-native design platforms → 5.6% annual returns
- Mid Case: Adobe sustains adoption across Creative Cloud and Document Cloud while layering in AI upsells → 12.6% annual returns
- High Case: Firefly and enterprise AI tools become major revenue drivers, boosting margins and customer stickiness → 17.0% annual returns
Adobe’s position as the creative standard gives it optionality, but much depends on how successfully it monetizes AI.
Stock #3: Microsoft (MSFT)
Microsoft sits at the center of enterprise workflows with Office, Windows, Azure, and Teams.
Its distribution across productivity and cloud could give it one of the strongest platforms for embedding AI broadly.
- Copilot in Office might become the default way knowledge workers create documents, presentations, and spreadsheets.
- Teams could evolve into a can’t-live-without hub where AI schedules, summarizes meetings, and automates follow-ups.
- On the developer side, GitHub Copilot is already shaping how code is written, and adoption could spread further into enterprise engineering teams.
- Azure may benefit as enterprises train and run AI models on its infrastructure, tying cloud spend more tightly to Microsoft’s ecosystem.
If usage expands, Microsoft could capture new revenue streams through seat upgrades, AI add-ons, and higher Azure consumption.
That combination of scale, distribution, and early AI adoption suggests Microsoft might be better positioned than almost anyone to monetize the application layer of AI.
Valuation Model Summary
Based on mid-case assumptions, Microsoft stock could be worth about $1,010 by mid-2030, implying a 100.4% total return from today’s price of ~$504. That equates to roughly 15.4% annualized returns over the next 4.8 years.
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What Happens If Things Go Better or Worse?
The model incorporates scenarios based on enterprise cloud adoption, Office and Teams usage, and AI copilots across productivity.
This is how returns might look depending on Microsoft’s performance:
- Low Case: AI adoption is slower than expected and Azure growth moderates → 7.5% annual returns
- Mid Case: Microsoft maintains steady enterprise growth while Copilot drives incremental seat upgrades and cloud consumption → 15.4% annual returns
- High Case: Copilot becomes a must-have across Office, Teams, and GitHub, while Azure captures major AI infrastructure demand → 17.4% annual returns
With Microsoft’s unmatched distribution and product breadth, even the low end of scenarios suggests durable compounding.
Stock #4: ServiceNow (NOW)
ServiceNow is the operating system for enterprise workflows, starting in IT service management and expanding into HR, finance, and customer operations.
Its strength comes from structured workflow data like tickets, requests, approvals, and resolutions that could serve as ideal training ground for AI models. Because ServiceNow sits in the middle of cross-department workflows, AI enhancements could ripple across the enterprise, compounding efficiency gains.
- AI copilots might assist employees by auto-generating responses, summarizing incidents, and routing requests to the right team without human intervention.
- Generative tools could help managers design new workflows or automate repetitive processes more quickly.
- If adoption grows, AI may raise platform stickiness while unlocking new pricing levers for premium automation and copilots.
This combination of data, workflow depth, and monetization potential suggests ServiceNow could be a major winner in applying AI across enterprise operations.
Valuation Model Summary
Based on mid-case assumptions, ServiceNow stock could be worth about $1,868 by the end of 2029, implying a 112.3% total return from today’s price of ~$880. That equates to roughly 18.9% annualized returns over the next 4.3 years.
What Happens If Things Go Better or Worse?
The model incorporates scenarios based on enterprise workflow expansion, AI-driven automation, and platform pricing power.
This is how returns might look depending on ServiceNow’s performance:
- Low Case: Workflow adoption slows and AI copilots see limited enterprise willingness to pay → 10.0% annual returns
- Mid Case: ServiceNow grows steadily as AI enhances efficiency and drives premium automation tiers → 18.9% annual returns
- High Case: AI transforms ServiceNow into the enterprise operating system, unlocking new categories and deepening enterprise reliance → 24.6% annual returns
ServiceNow’s positioning at the center of enterprise workflows gives it one of the clearest paths to AI-driven value creation.
Stock #5: Intuit (INTU)
Intuit is the financial backbone for small businesses and consumers through its products like QuickBooks, TurboTax, Credit Karma, and Mailchimp. Its biggest advantage is the structured, real-world financial data it processes that could be highly valuable for training and applying AI.
AI has the potential to turn Intuit’s products from static software into proactive financial assistants. For consumers, that could mean personalized tax advice, optimized refunds, or smarter budgeting. For small businesses, it could mean automated bookkeeping, cash flow forecasting, and even near-autonomous tax preparation.
Because financial workflows are recurring and compliance-heavy, once AI proves reliable, customers may be very reluctant to switch providers. Additionally, if these features gain adoption, Intuit might be able to charge more for premium plans or upsell new services like autonomous bookkeeping or AI-driven marketing campaigns.
This combination of data depth, workflow importance, and upsell potential suggests Intuit could be well positioned to benefit from AI at the application layer.
Valuation Model Summary
Based on mid-case assumptions, Intuit stock could be worth about $1,241 by mid-2030, implying an 88.9% total return from today’s price of ~$657. That equates to roughly 13.8% annualized returns over the next 4.9 years.
What Happens If Things Go Better or Worse?
The model incorporates scenarios based on small business formation, tax and credit adoption, and AI-driven financial automation.
This is how returns might look depending on Intuit’s performance:
- Low Case: Small business growth slows and tax software adoption plateaus → 7.4% annual returns
- Mid Case: Intuit maintains steady growth as digital tax and bookkeeping adoption expands → 13.8% annual returns
- High Case: AI copilots accelerate adoption of autonomous finance and expand premium monetization → 17.6% annual returns
With Intuit’s recurring revenue base and deep data moat, outcomes across scenarios still point to meaningful compounding.
Bonus: Atlassian (TEAM)
Atlassian powers collaboration for software teams through Jira, Confluence, Trello, Loom, and other workflow tools. Its advantage lies in the massive amount of structured data it holds on how projects are managed, how teams collaborate, and how knowledge is shared.
AI could turn turn Atlassian’s products into tools that actively predict bottlenecks, help to reallocate resources, and guide projects toward completion. Confluence might evolve from a static knowledge base into a living system that automatically curates, organizes, and surfaces the information teams need.
Over time, Atlassian could position itself as the operating layer for how work gets done, not just a set of collaboration tools. If this vision plays out, AI might expand its role inside organizations, raise customer dependence, and open the door to higher monetization through premium tiers and deeper enterprise adoption.
Valuation Model Summary
Based on mid-case assumptions, Atlassian stock could be worth about $407 by mid-2030, implying a 141.3% total return from today’s price of ~$169. That equates to roughly 19.9% annualized returns over the next 4.8 years.
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What Happens If Things Go Better or Worse?
The model incorporates scenarios based on developer collaboration, project management demand, and AI-driven work orchestration.
This is how returns might look depending on Atlassian’s performance:
- Low Case: Growth moderates as competition intensifies and AI features fail to stand out → 11.9% annual returns
- Mid Case: Atlassian sustains adoption while AI copilots improve collaboration, documentation, and workflow management → 19.9% annual returns
- High Case: AI transforms Jira and Confluence into intelligent work managers, expanding Atlassian’s role as the operating layer for software teams → 24.6% annual returns
Atlassian’s deep integration into how engineers and teams collaborate provides a strong base, with AI offering a potential step-change in value.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
