What Happened?
A number of stocks fell in the afternoon session after the latest Consumer Price Index (CPI) report came in hotter than expected, signaling that inflation remained stubbornly high.
The April CPI data revealed a 3.8% annual increase, surpassing economists' forecasts. This report is a key measure of inflation, tracking the average change in prices paid by consumers for goods and services. The persistent inflation is significant because it dampens expectations for the Federal Reserve to cut interest rates.
Higher interest rates for a longer period tend to negatively impact growth-oriented sectors like technology and software, as they make the companies' future earnings less valuable in today's terms. With the prospect of rate cuts diminishing, investors reassessed valuations, leading to a broad sell-off across the tech sector.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Video Conferencing company RingCentral (NYSE: RNG) fell 3.8%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
- Hospitality & Restaurant Software company Toast (NYSE: TOST) fell 3.7%. Is now the time to buy Toast? Access our full analysis report here, it’s free.
- Marketing Software company Braze (NASDAQ: BRZE) fell 6.2%. Is now the time to buy Braze? Access our full analysis report here, it’s free.
- Vertical Software company Alarm.com (NASDAQ: ALRM) fell 2.6%. Is now the time to buy Alarm.com? Access our full analysis report here, it’s free.
- Content Delivery company Fastly (NASDAQ: FSLY) fell 3.6%. Is now the time to buy Fastly? Access our full analysis report here, it’s free.
Zooming In On Braze (BRZE)
Braze’s shares are extremely volatile and have had 37 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 8 days ago when the stock gained 3.3% on the news that strong earnings from enterprise leaders ignited a massive rally across enterprise tech.
Atlassian led the charge, soaring nearly 30% after reporting 32% revenue growth and an unexpected acceleration in cloud adoption. Similarly, Twilio jumped 20% following its fastest growth in three years, fueled by a surge in demand for its AI-integrated voice tools.
This recovery was also bolstered by record-breaking cloud strength; while AWS grew a solid 28%, Google Cloud stunned Wall Street with a 63% revenue increase, proving that enterprise AI infrastructure spending is finally translating into tangible, top-line returns for the software layer. This rally reflected a strategic pivot as investors returned to high-growth software-as-a-service (SaaS) names that previously trailed the broader market.
Braze is down 40.6% since the beginning of the year, and at $19.35 per share, it is trading 47.6% below its 52-week high of $36.89 from May 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 $207.17.
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