Braze stock dropped nearly 9% yesterday. Hit a 52-week low. Salesforce down 8%. ServiceNow down 7%. The iShares Software ETF is down 28% from its recent highs. $300 billion in market value wiped out in a single day because Anthropic released a legal plug-in and OpenAI updated Codex. I've spent the last three years helping Fortune 1000 brands implement and optimize Braze. I've seen hundreds of RFPs. Hundreds of buying decisions. Hundreds of conversations with CMOs, VPs of Marketing, and CRM leaders. You know how many have said "actually, we think we can just build this ourselves with AI"? Zero. Not one. Here's what Wall Street doesn't understand about customer engagement platforms: Infrastructure isn't code. Braze processed 3.9 trillion messages last year. They handle billions of API calls daily across thousands of brands. That's not a weekend project. That's years of engineering on real-time data pipelines, delivery infrastructure, and failover systems. You can't prompt your way to that kind of scale. Years of engagement intelligence. Braze AI isn't a feature bolted on last quarter. They've been building AI capabilities for almost a decade, trained on trillions of customer interactions across 2,200+ brands. That proprietary data flywheel compounds over time. You can't replicate it with a prompt. Compliance is a moat. SOC 2 Type II. HIPAA. ISO 27001. GDPR. Enterprises require these certifications and audit trails. That's legal and operational infrastructure that takes years to build and maintain. 140+ integrations. Each one is a relationship, a support agreement, ongoing maintenance. Not just an API call. The Shopify CEO built an app to read his MRI. Cool. He didn't build Epic Systems. The stocks getting crushed yesterday—Thomson Reuters, RELX, Wolters Kluwer—are horizontal software companies selling document search and legal research. Those are vulnerable to AI disruption. Braze is different. It's infrastructure. It's plumbing. It's the system of record for customer engagement that everything else plugs into. And here's what Wall Street is completely missing: AI makes Braze more valuable, not less. AI expands what's possible inside Braze. More sophisticated personalization. More complex journey orchestration. More real-time decisioning. That complexity increases enterprise demand for the platform—and for experts who know how to architect it. The companies that should be worried are the ones selling simple, commoditized features that AI can replicate. Braze is selling infrastructure that AI needs to run on. To the Braze team: ignore the noise. Keep executing. Focus on the fundamentals. The business is working. Patient capital will be rewarded. The market is having a panic attack. The fundamentals haven't changed.
Blake Koriath
5mo
Well said, Michael Burton. Makes me think of the old Benjamin Graham quote: "In the short run, the market is a voting machine, but in the long run, it is a weighing machine". Will be interesting to see what the "weight" of these software companies' data, customer relationships, compliance, and integrations are in the long run.
Uttam Kumaran 🧠
5mo
'AI makes Braze more valuable, not less' - this is it Michael Burton! Wall Street is confusing horizontal software (legal research, document search) with infrastructure. We've seen the same thing with data platforms - AI doesn't replace the pipes, it increases demand for them. More complexity = more need for reliable infrastructure!!
Aaron A.
5mo
I think you are correct. It might be a "post software scarcity" world but that doesn't solve infrastructure. And a lot of the parts of the codebase that you don't want to "move fast and break things on" will also continue to rely on well trusted sources that provide security, infrastructure/hosting, rollback, authentication/authorization etc. I think companies that provide these services will be well served to ensure their documentation is easily understood by LLM's, that there is just an exhaustive amount of examples of how to implement it in all the public repo's. The problem that killed Tailwind could be a huge boost to a IaaS/PaaS/XaaS provider.
Ryan Koonce
5mo
The biggest fundamental that hasn't changed is that Legacy CMOs still spend billions on SFMC even though almost any modern solution is better. Procurement and IT always favors the big enterprise systems. Yes, we can build amazing workflows in n8n and use AI for so many new things but Legacy Executive Buyers are always a decade behind. The real question is whether these massive increases in productivity crack open opportunities in the Enterprise, because in the near term, the "old" way will be so obviously slow and unoptimized that Legacy Executives won't be able to hide behind their incompetence anymore. They will lose in the marketplace. This will crack open billions in TAM for modern martech (Braze etc) and other systems that were largely inaccessible before. If you're not doing today in 5 days what used to take 5 weeks, you're already behind.
Mo Topalovic
5mo
Classic case of sentiment outrunning fundamentals. Volatile markets, fast AI narratives, same cycle. Infrastructure and execution still matter.
Brian Wasserman
5mo
This connects to something I wrote about earlier this week: the market isn't panicking irrationally - it's asking the right question. Complex infrastructure platforms aren't vulnerable to being replaced wholesale. Years of use-cases and edge cases accumulated over time make full replacement difficult. But they ARE vulnerable if customers only use basic features. The SaaS companies getting hit aren't being punished because AI can replicate their full capability. They're being repriced because investors are asking: "How many customers are using the complex parts vs. just the simple slice?" AI can't replace sophisticated infrastructure. But it can replace the way 80% of customers actually use that infrastructure. That's what the market is figuring out right now.
Todd Speicher
5mo
I agree with you for the short term, but eventually AI will be able to create code in a day or two for a system of record. So is the future of competitive advantage building your own custom systems of record v. how you take advantage of off the shelf platforms. That's the question i am asking myself.
Melody Astley
5mo
I get what you’re saying, but the fundamentals are changing. We need to redefine legacy systems, and I’m not talking about COBOL. I’m talking about the core applications from the big ones. CRMs, productivity suites - you know what I mean. But it’s destabilizing. It requires a new operating model. Governance across the board changes. Few technology professionals want a new lens for their existing skills. God forbid - they might be like a systems programmer!! This isn’t like cloud or SaaS. This is a paradigm shift.
As a shareholder, my concern with Braze is less about yesterday and more about their consistent lack of success in the stock market and failure to penetrate large enterprise sales. Their share price is down -80% since their IPO and is -66% over the last 2 years. With no real sustained positive trends since they went public. It’s by far the one of the lowest performing stocks in the sector.