Shares of QXO, Inc. (NYSE: QXO) fell 23% in July, according to data from S&P Global Market Intelligence.
QXO didn’t report earnings during the month, but it did close on the acquisition of TopBuild on July 1.
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QXO is executing a roll-up strategy to consolidate the building-products distribution business under CEO Brad Jacobs and his team, so acquisitions are a core part of QXO’s game plan. Yet while TopBuild could very well build value for QXO, it appears investors may have had some trepidation about the purchase, which is QXO’s biggest acquisition to date.
In addition, oil prices rebounded in July as the fragile “ceasefire” deal with Iran seemed to unravel. That pushed interest rates higher, and higher rates tend to weigh on cyclical stocks, such as those in housing and construction.
QXO closes TopBuild
On July 1, QXO officially closed on the $17 billion acquisition of TopBuild. QXO had previously purchased Beacon Roofing for $11 billion in 2025 and Kodiak Building Partners for $2.25 billion in early 2026, so this was QXO’s largest major purchase to date.
Why, when acquisitions are the strategy, might investors be wary of the TopBuild buy? For one, TopBuild is the largest of the acquisitions thus far, and therefore could make investors worry about QXO’s debt load or dilution. Second, some investors may have believed that, while TopBuild was an excellent, high-quality company, QXO might have been paying full price, leaving little room for traditional improvements and margin expansion.
QXO seemed to admit as much. In a Q&A posted on its website after the purchase, the company stated:
We also liked the quality of the business itself. TopBuild has an already best-in-class margin profile and proven operating model rather than requiring the same degree of turnaround at Beacon and Kodiak. The value creation opportunity is less about cost cutting and more about combining a very good business with our broader platform, technology roadmap, procurement scale, pricing discipline, and cross-sell opportunity. Moreover, the availability, know-how, and tenure of TopBuild’s installation labor force is a significant strategic advantage.
TopBuild shareholders had the option to receive more cash or more stock as compensation for the buyout. Nearly all TopBuild voting shareholders wound up opting for as much cash as possible, rather than shares, with only 1.4% voting to receive QXO stock for their TopBuild shares. That perhaps indicated a lack of conviction in QXO’s future, at least among TopBuild shareholders.
