What Happened?
A number of stocks jumped in the afternoon session after Nvidia CEO Jensen Huang dismissed fears that artificial intelligence would cannibalize the enterprise software sector.
High-growth names like Zscaler (ZS) and CrowdStrike (CRWD) saw significant rebounds as investors reassessed the "AI headwind" narrative that had previously weighed on valuations. Huang's comments acted as a powerful catalyst, signaling that the intersection of generative AI and established software platforms is a symbiotic relationship rather than a zero-sum game. During a CNBC appearance, Huang argued that the market "got it wrong," specifically defending the indispensable role of platforms like ServiceNow. He emphasized that these companies are uniquely positioned to deploy fine-tuned AI agents that utilize their existing specialized tools.
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) jumped 6.1%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
- E-commerce Software company Wix (NASDAQ: WIX) jumped 7.8%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
- Marketing Software company Braze (NASDAQ: BRZE) jumped 8%. Is now the time to buy Braze? Access our full analysis report here, it’s free.
- Vertical Software company Guidewire Software (NYSE: GWRE) jumped 5.9%. Is now the time to buy Guidewire Software? Access our full analysis report here, it’s free.
- Communications Platform company Bandwidth (NASDAQ: BAND) jumped 7.3%. Is now the time to buy Bandwidth? 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 2 days ago when the stock gained 9.8% on the news that solid economic data, including a beat on consumer confidence boosted sentiment.
The positive reports fueled a "Turnaround Tuesday" relief rally across the market, with the technology sector among the leaders. The Conference Board's Consumer Confidence Index rose to 91.2 in February, indicating a more optimistic outlook from consumers about income and business conditions. Also, a recent announcement from Anthropic regarding new collaborative tools for its Claude AI agent software helped calm investor nerves. The company's move to expand its AI tools into sectors like human resources and investment banking signals a potential for partnership rather than replacement. This shift in sentiment was reflected in the market, with the iShares Expanded Tech-Software Sector ETF surging 2.4% as investors bought back into beaten-down software stocks.
Braze is down 41.2% since the beginning of the year, and at $19.15 per share, it is trading 51.1% below its 52-week high of $39.14 from March 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 $205.06.
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