What Happened?
Shares of customer engagement platform Braze (NASDAQ: BRZE) fell 1.9% in the morning session after investor anxiety rose ahead of its own earnings report, which was amplified by weak guidance from industry peer Salesforce (CRM).
Braze is scheduled to release its quarterly earnings after the market closes. Investor caution is heightened by the stock's performance last quarter, when it dropped 17.65% despite beating earnings per share estimates, and by expectations of slowing revenue growth.
Compounding these concerns, Salesforce shares declined significantly after the company provided a conservative third-quarter revenue forecast that fell short of expectations. Salesforce's outlook points to broader market uncertainties affecting enterprise software spending, creating negative sentiment across the sector. Investors appear to be selling Braze shares in anticipation of potentially similar cautious guidance in its upcoming report.
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What Is The Market Telling Us
Braze’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 3.9% on the news that the broader market rallied as Federal Reserve Chair Jerome Powell indicated that interest rates could be cut. Powell's comments, delivered at the Jackson Hole Economic Policy Symposium, indicated that the central bank might adjust its policy due to a "shifting balance of risks" to employment and inflation. He noted that economic growth has slowed and the labor market is weaker than previously thought. This signal that the Federal Reserve could begin cutting interest rates, after holding them steady throughout 2025, sparked a significant relief rally across the stock market. Tech stocks were particularly strong, with major indices like the S&P 500 and Nasdaq Composite jumping significantly on the news.
Braze is down 38.3% since the beginning of the year, and at $26.77 per share, it is trading 43.3% below its 52-week high of $47.22 from January 2025. Investors who bought $1,000 worth of Braze’s shares at the IPO in November 2021 would now be looking at an investment worth $286.61.
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