Salesforce's stock falls as investors chafe at the cost of latest AI purchase

By Steve Goldstein and Emily Bary

An analyst calls it 'a bit odd' that Salesforce plans to buy Braze at such a high premium to its recent stock price

Salesforce said it is buying Braze.

Salesforce is making a nearly $6 billion acquisition to bolster its capabilities in artificial intelligence and marketing, but Wall Street isn't necessarily sold on the price of the deal.

The company plans to buy Braze (BRZE), which operates a customer-engagement platform with 2,770 customers, in a deal it says will help businesses improve the personalization of their offerings. The $5.7 billion all-cash offer equates to $47.50 per Braze share and represents a 58% premium over Monday's close.

That premium is even greater than the 30-day moving average of Braze's stock price, according to Evercore ISI analyst Kirk Materne, who noted the takeout price is 80% above that average.

The extent of that premium "seems a bit odd unless it was competitive - in our view," he wrote.

Over the past two decades, Salesforce (CRM) has developed a reputation for being willing to pay for new businesses and capabilities. The company has acquired Slack, Tableau and other entities that it has viewed as complementary to its software empire.

The technology stacks at both Salesforce and Adobe "have remained core to enterprise marketing efforts, yet their ability to compete given the changes in consumer/brand expectations (even pre-AI) and now with AI and agentic commerce has been diminished to the point where M&A was and remains a necessity," Baird analyst Rob Oliver wrote on Tuesday.

In a release on Tuesday, Salesforce touted Braze's "AI-powered optimization across content, offers, channels, and timing, helping marketers make each interaction more relevant."

Over the years, some investors have bristled at the cost of moves to acquire new technologies. The acquisitive approach also makes it more difficult to assess how Salesforce's core business is performing.

Those sorts of debates are in focus once more following the Braze announcement, as Salesforce shares dip about 1% on a day when the iShares Expanded Tech-Software Sector ETF IGV is trading nearly 1% higher.

Evercore ISI's Materne wrote that "more acquisitions could muddle the visibility into 'core' growth right at a time when there is a (small) shift back towards secular growth stories with strong cash flow." That said, Salesforce intends to disclose Braze's revenue impacts for a year after the deal closes, helping to provide a bit more transparency for investors trying to understand the puts and takes of Salesforce's business performance.

Materne added that "the deal logic makes sense" but "the timing and price are likely to be a bit of a debate."

Shares of a Braze rival, Klaviyo (KVYO), jumped 10% in Tuesday morning action.

Klaviyo's "marketplace relationship, move upmarket, and international presence make it a more complex but no less attractive asset."

-Steve Goldstein -Emily Bary

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10-20-26 1127ET