Braze Shares Down Amidst Earnings Anxiety and Salesforce's Weak Guidance

Braze shares fell 1.9% due to investor anxiety ahead of its earnings report, exacerbated by weak guidance from industry peer Salesforce. The stock market's overreaction to news and the previous big move 13 days ago, where the stock gained 3.9% on the news of potential interest rate cuts, indicate the market considers this news meaningful but not fundamentally changing its perception of the business. Braze is down 38.3% since the beginning of the year and trading 43.3% below its 52-week high.

Braze shares fell 1.9% on September 2, 2025, as investor anxiety ahead of its earnings report was exacerbated by weak guidance from industry peer Salesforce. The stock market's overreaction to news and the previous significant move 13 days ago, where the stock gained 3.9% on the news of potential interest rate cuts, indicates that the market considers this news meaningful but not fundamentally changing its perception of the business. Braze is down 38.3% since the beginning of the year and trading 43.3% below its 52-week high.

Salesforce's Q2 2025 earnings report delivered mixed results, with revenue rising 10% to $10.2 billion, exceeding forecasts, but shares fell 4% due to slow AI monetization [1]. The company's AI initiatives, such as Data Cloud and Agentforce, grew 120% in ARR but contributed less than 3% of total revenue, with meaningful scaling expected by 2027. This slow monetization of AI initiatives has raised questions about the platform's ability to transition from innovation to profit, potentially influencing investor sentiment towards companies like Braze.

The market's overreaction to Salesforce's earnings and the subsequent drop in Braze's stock price can be attributed to several factors. First, the industry's reliance on strong earnings reports from peers can drive investor sentiment. Second, the market's perception of the business's fundamentals may have been influenced by the recent trend of AI-driven growth, which has been slower than expected. Finally, the previous significant move in Braze's stock price, driven by potential interest rate cuts, may have set a high bar for future performance.

Investors should closely monitor Braze's earnings report, scheduled for release soon, to assess the company's performance and guidance. The market's overreaction to Salesforce's earnings and the previous stock move suggests that investors may be more sensitive to news and may require clear evidence of improved performance to reverse the recent decline in Braze's stock price.

References:
[1] https://www.ainvest.com/news/assessing-salesforce-q2-earnings-strategic-ai-moves-mixed-guidance-2509/