Could Braze be the next big opportunity in the marketing tech space? Discover what our experts think about its growth potential and risks in this insightful analysis.
A number of stocks fell in the afternoon session after markets pulled back as a hotter-than-expected wholesale inflation report for July dampened hopes for a Federal Reserve interest rate cut. The U.S. Producer Price Index (PPI), a key measure of wholesale inflation, rose 0.9% month-over-month in July, far exceeding the 0.2% increase that economists had predicted. Annually, prices at the wholesale level jumped 3.3%, also surpassing the 2.5% forecast. This hotter-than-expected data has poured cold water on widespread expectations for an interest rate cut from the Federal Reserve next month. Persistent inflation makes it less likely for the central bank to ease monetary policy. Sectors with high-growth stocks, such as SaaS, are particularly sensitive to interest rate changes, as the prospect of higher rates for longer can diminish the present value of their future earnings, leading to a decline in stock prices.
A number of stocks jumped in the afternoon session after the SaaS sector continued to rally as favorable inflation data bolstered hopes for a Federal Reserve interest rate cut. This optimism was largely driven by a benign July Consumer Price Index (CPI) report, which solidified investor expectations for a Federal Reserve interest rate cut. Following the release of the inflation data, which showed a year-over-year increase of 2.7%, the probability of a rate cut in September surged to over 96%. Lower interest rates are typically beneficial for growth-oriented technology stocks, as they can reduce borrowing costs and increase the present value of future earnings. Adding to the positive sentiment was a 90-day delay in the imposition of higher tariffs on Chinese goods, which reduced trade-related uncertainty for the technology sector.
The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential.
However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
Growth boosts valuation multiples, but it doesn’t always last forever.
Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
A number of stocks fell in the afternoon session after the White House announced a new round of steep global tariffs, sparking concerns of a trade war and its impact on the U.S. and global economies. This move creates significant uncertainty for businesses and investors. The new tariffs, with rates of up to 41% on imports from 68 countries and the European Union, prompted a broad market sell-off, with the tech-heavy Nasdaq index showing notable weakness. Adding to the bearish sentiment was a weaker-than-expected July jobs report, which revealed that employers created only 73,000 jobs, far below economists' expectations. This combination of trade fears and signs of a slowing labor market has created a "risk-off" environment, leading investors to pull back from growth-oriented sectors like software and technology.
A cash-heavy balance sheet is often a sign of strength, but not always.
Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Shares of customer engagement software provider Braze (NASDAQ:BRZE) jumped 3.8% in the morning session after Mizuho Securities initiated coverage on the stock with an 'Outperform' rating and a $40 price target. The 'Outperform' rating indicated Mizuho's confidence that Braze's stock would perform better than the broader market. In its report, the firm highlighted the company's strong customer engagement platform and identified several avenues for long-term growth. These key drivers included a focus on specific industry sectors, international expansion plans, and a growing partner network. The analyst's view of the stock's price as an appealing entry point for investors also likely contributed to the positive market reaction.
As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the sales and marketing software industry, including Braze (NASDAQ:BRZE) and its peers.
Shareholders of Braze would probably like to forget the past six months even happened. The stock dropped 37.2% and now trades at $28.19. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Semrush (NYSE:SEMR) and the rest of the sales and marketing software stocks fared in Q1.
Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks.
But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Yext (NYSE:YEXT) and its peers.
A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south.
While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth.
Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on.
But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
Let’s dig into the relative performance of ON24 (NYSE:ONTF) and its peers as we unravel the now-completed Q1 sales and marketing software earnings season.
Shares of customer engagement software provider Braze (NASDAQ:BRZE) fell 17.2% in the afternoon session after the company reported mixed first quarter 2025 (fiscal 2026) results: its full-year EPS guidance missed and its EPS guidance for next quarter fell short of Wall Street's estimates.
