Why Braze Stock Was Sliding This Week
Key Points
Large tech companies are planning to spend vast sums on AI infrastructure.
One of the largest revealed that its 2027 capex will be substantially higher, chiefly for this reason.
- 10 stocks we like better than Braze ›
Tech stocks that weren't manufacturers of artificial intelligence (AI) hardware were feeling the squeeze this week. Several top tech companies indicated plans to spend heavily on building out their AI capabilities; with that, investors aggressively sold out of software companies.
One of these was customer engagement software specialist Braze (NASDAQ: BRZE). As of Friday morning before market open, the company's shares were down by 15% week to date, according to data compiled by S&P Global Market Intelligence.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
200 billion reasons to be worried?
Braze didn't have any news of its own sufficient to move its stock meaningfully. It's clear, then, that the company was caught up in the general software rout. If we have to zero in on one particular catalyst for this, it's the second-quarter results published on Wednesday by Alphabet.
Image source: Getty Images.
While Google's parent showed robust growth and estimates-beating fundamentals, it raised its guidance for full-year 2026 capital expenditures (capex) to $195 billion to $205 billion. That was up from its preceding $180 billion to $190 billion. Management also said that capex will increase substantially in 2027.
Not surprisingly, Alphabet executives cited the need to invest aggressively in AI infrastructure as a key reason for the higher capex projections.
A stock for the patient
Alphabet has been on top of the tech food chain for decades now, so where it goes, many peer companies will follow. The prospect of mountains of IT budget money being diverted to AI from, say, software implementations and upgrades, spooked investors. We shouldn't be surprised if this fear lingers for some time.
Given this, I'd feel comfortable taking a chance on a solid but beaten-down software company. Any tool that can give a business an edge with customer engagement is inherently appealing, and Braze's solutions qualify. I should caution, though, that these concerns about "AI spend disruption" might not dissipate for a while, so Braze looks more like a mid- to long-term play.
Should you buy stock in Braze right now?
Before you buy stock in Braze, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Braze wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $369,577!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,301,557!*
Now, it’s worth noting Stock Advisor’s total average return is 908% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 24, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Braze. The Motley Fool has a disclosure policy.
Recommended Articles
