It's been a wild 2026 for software stocks as investors try to figure out which companies will adapt in a new era of "vibe-coding" AI tools.

You may never have heard of Braze, but it sums up the turmoil. Shares of the marketing software developer sank 11% on Wednesday despite a second-quarter earnings beat.

That may partly be down to profit-taking. The stock shed more than half its value between the start of the year and late February, then clawed back almost all of its losses as fears of a software wipeout eased.

But Wednesday's selloff also shows investors can't decide if Braze will be an AI winner or loser. The only weak point in the second-quarter report was so-so growth in remaining performance obligations, which measures the income the company will collect from contracts it's already signed.

Paid adoption of Braze's AI tools looks promising but that is yet to materialize into top-line growth, William Blair analyst Arjun Bhatia wrote in a research note where he reiterated his Outperform rating.

"The stock reaction is largely due to lighter RPO quarterly growth while investors wait for the AI monetization catalyst to play out," Bhatia added.

The worries about AI overshadowed Braze's better-than-expected results, which came alongside a full-year revenue guidance hike.

The company posted adjusted net income of 19 cents a share, as revenue jumped 19% from a year ago to $227 million. Analysts were expecting earnings of 15 cents a share on revenue of $220 million, per FactSet.