WD WDAY Workday Inc. Loading... : Bullish and Bearish Analyst Opinions

Author explicitly states they are invested in and long-term bullish on beneficiaries like RDDT, ZETA, PLTR, and TEAM, arguing their financials are improving and AI will aid their business, making them undervalued buys.

Watch WDAY as Workday faces headwinds from budget prioritization shifting to AI infrastructure and away from discretionary transformation projects.

Watch Workday as a system-of-record data beneficiary; AI increases the value of HR and finance datasets when connected to governed analytics and agent workflows, providing a low-to-medium positive read-through.

The tweet contrasts market reactions to Intuit's modest beat and raise being called a terrible quarter versus Workday's reiterated guidance being called a great quarter, highlighting fintwit's inconsistent framing.

The tweet reports contrasting market reactions to Intuit's modest beat and raise being called a terrible quarter versus Workday's reiterated guidance being called a great quarter, without expressing a forward-looking view.

Avoid seat-model software stocks.

WDAY is explicitly mentioned alongside CRM as a potential move. Same logic as CRM – if the “Claude killed SaaS” narrative is false, WDAY should rebound. Contrarian long on Workday, following the same pattern. WDAY’s HCM/ERP niche may be more vulnerable to AI substitution; execution risk.

Owns Intuit, Workday, Salesforce, Roper for gains.

Long WDAY as a cloud/SaaS player that could be viewed similarly to Salesforce in leveraging AWS infrastructure.

True FCF yield of 7%, 5-year FCF CAGR of 40%, stock down -50% over the past year. Wall Street assumes HR software cycle dead, but the company compounds cash aggressively and the moat is intact. Buying a high-quality compounding machine at half price; market overreaction creates margin of safety. HR software demand could structurally decline if AI agents replace seat-based models; customer concentration or macro slowdown.

The author expresses caution on stocks like WDAY and ADBE that have fallen over 50% and face a growth cliff with forward sales estimates below 20%, suggesting a moody and risky outlook.

Software stocks cheap with growth and AI opportunity.

Buy WDAY as the current 3x sales valuation is an unjustified discount driven by AI fears and management concerns, with fair value closer to 6-8x sales for a business of this quality.

Workday scored 3.67 for AI resilience, identical to CrowdStrike's score. While CrowdStrike is only down 13%, Workday is down 37% YTD, showing a massive divergence in market treatment for the same risk profile. WDAY is mispriced relative to its actual AI disruption risk and offers a strong value entry point. AI models could eventually replicate HR systems, though organizational inertia currently protects it.

Chamath presents chart showing SaaS companies like Snowflake had high valuation multiples (e.g., ~100 years to repay via free cash flow in 2023) that are now compressing sharply. AI disruption threatens the durability of cash flows, leading markets to rerate these companies based on perceived fragility in a world of potential superintelligence. Avoid due to valuation reset and increased discount rates applied to future cash flows. If AI disruption is slower or less severe than expected, cash flows may remain durable.

The author identifies specific high-yield bonds and corporate credits as attractive idiosyncratic investment opportunities.

The author is evaluating software company bonds for potential value despite skepticism regarding their equity valuations.

"The legacy software enterprise software companies like SAP, like Oracle, like Workday... I would not be surprised if the amount of profits from these companies continues to decline as we're seeing the 99% for everyone being able to recreate what took them ten years to build in the past in one week." Legacy enterprise SaaS companies rely on high switching costs, massive development barriers, and monopolistic data silos to maintain high margins. AI coding agents completely destroy this moat by lowering the cost of custom software creation to near zero. Instead of paying expensive recurring licensing fees for rigid software, businesses will generate their own bespoke tools, leading to severe margin compression and customer churn for legacy providers. SHORT because the fundamental business model of charging rent for generic, siloed enterprise software is being disrupted by cheap, hyper-customized AI generation. These legacy giants successfully pivot by integrating AI into their own platforms, leveraging their massive existing distribution networks and entrenched enterprise relationships to actually increase prices and retain market share.

Adobe isn't the only company in software that is changing up the C-suite. Workday bringing back its founder... Five9 announcing a new CEO... MongoDB appointing CJ Desai... Asana with a new CFO... boards are conducting reviews real time. They say they want visionaries who can lead these companies through this transformational shift... while also having a deep structural experience in M&A. The rapid advancement of AI is forcing a defensive posture across the broader SaaS industry. Boards are panicking and swapping executives to find leaders with M&A expertise. This indicates these mid-to-large cap companies are either preparing to be acquired as the sector consolidates, or are struggling to adapt their core products to an AI-first world. WATCH. The SaaS sector is entering a period of high transitional risk. Investors should wait on the sidelines for clear winners to emerge from the upcoming M&A consolidation wave before deploying capital into legacy cloud names. Prematurely shorting these names could result in heavy losses if they are acquired at a premium by mega-cap tech companies looking to buy market share.

"Our mission is that anyone can create software... naturally, their assets become less valuable. What we are seeing is that people who previously had different software providers... build out their own technology stack." AI-assisted coding is democratizing software creation. Legacy SaaS companies that charge high recurring licensing fees will face massive churn as enterprise clients realize they can use AI to build and maintain their own custom internal tools for a fraction of the cost. SHORT. The moat for traditional enterprise software is evaporating, which will lead to structural multiple compression and declining profit margins across the sector. Legacy SaaS companies successfully integrate AI into their own platforms, creating enough added value to justify their pricing and retain enterprise clients.

We were worried about before this military strike in Iran, which was the AI apocalypse, you know, sort of a whodunit, which industries is it going to kill or do serious damage to like software as a service. AI agents and automated tools are increasingly capable of performing tasks that previously required human workers. Because traditional SaaS companies charge per-seat licensing fees, a reduction in human headcount directly destroys their revenue models and pricing power. Short legacy SaaS providers and sector ETFs as AI cannibalizes their core business models. Legacy SaaS companies successfully integrate AI into their platforms and charge premium subscription tiers, offsetting the loss of human seats.

Cramer observes a rotation where "Halo" trades (Industrials) are selling off, while Enterprise Software stocks (Broadcom, ServiceNow, Workday, Adobe, Salesforce, Veeva) are bouncing. The market previously punished these software stocks on the belief that AI (Anthropic/OpenAI) would make them obsolete. Cramer argues this is "absurd" because these companies are fiercely pivoting to integrate AI. The rotation suggests the "death by AI" narrative was priced in too aggressively, creating a rebound opportunity. LONG. Buy the rebound in enterprise software as the "Halo" trade unwinds. Continued oil price spikes could drag down the entire growth sector regardless of the rotation.

"Perhaps because of the stellar earnings from Broadcom... maybe it's because of the bounce that we saw in ServiceNow, Workday, Adobe, Salesforce, and now Veeva Systems... There's been a widespread belief that anything enterprise software can and will be [replaced by AI, but that is reversing]." The market had aggressively sold off enterprise software under the fear that AI would render these SaaS models obsolete. Broadcom's earnings served as a "reality check" catalyst, proving these companies are resilient. This triggers a short-squeeze or value rotation back into high-quality software names that were oversold. Capital is rotating back into software as the "AI death" narrative is disproven by actual earnings. If bond yields spike again, high-duration assets like software could face renewed pressure regardless of the AI narrative.

Jack Farley notes that SaaS (Software as a Service) stocks are declining because investors fear AI can "create this software... for a tiny fraction" of the cost. Howitt agrees, citing Kodak's bankruptcy due to digital photography as the historical precedent for this type of "Creative Destruction." If code becomes a commodity produced by Generative AI, the "moat" of traditional SaaS companies (proprietary codebases and high switching costs) erodes. They risk becoming the "hand-loom weavers" or "Kodak" of the AI era—displaced by a cheaper, faster method of production. Avoid legacy SaaS models that rely on seat-based pricing for code that AI can replicate cheaply. AI may serve as a co-pilot that increases SaaS margins rather than replacing them entirely.

These "Big Four" enterprise software stocks are rebounding (e.g., Salesforce up from $181 to $196) after earnings reports. The narrative that "AI will replace all software" is proving overblown. The Department of War breaking with Anthropic suggests AI models aren't invincible, making established software players look attractive again after the sell-off. Long the rebound in established enterprise software. Actual churn in their customer base due to AI agents replacing seats.

The "Big Four" enterprise software companies (Adobe, Salesforce, ServiceNow, Workday) have been battered by the narrative that AI (Anthropic/Vibe Coding) will make them obsolete. However, Workday and Salesforce recently rallied despite reporting "disappointing" or "not great" quarters. When stocks rally on bad news, it indicates the negative sentiment is fully priced in. The fear that AI will "wipe out" these firms is receding, or at least the Department of War's break with Anthropic suggests AI disruptors aren't invincible. Long these "Big Four" names as they U-turn from the AI-death narrative. Re-acceleration of AI capabilities that genuinely threaten seat-based software licensing models.

"I think the idea that A.I. simply going to wipe out a lot of software stocks I think is overblown... What is not good? That is the hard part of those businesses, legal things, auditing." The market has aggressively sold off "System of Record" companies (like Workday) based on the fear that AI agents will replace them. However, AI currently lacks the reliability for high-stakes compliance, legal, and audit functions. These incumbents have deep moats (switching costs) that AI cannot easily bridge yet. The sell-off is an overreaction; these companies will likely integrate AI rather than be replaced by it. Rapid advancement in AI agent accuracy could eventually threaten the "system of record" moat faster than anticipated.

70% of software stocks made 3-month lows last week. Sentiment is that "Software is dead" due to AI. When a sector is universally hated and hits extreme oversold levels (similar to COVID lows), it often marks a "local bottom." Bad news (like Workday's earnings) is being bought, suggesting sellers are exhausted. Cover shorts and buy the bounce in Software. AI actually does structurally displace SaaS revenue models faster than anticipated.

"This rebound was all artifice... Workday's guidance was dismal and its rally just as hard... Trust me when I tell you it has nothing to do with the fundamentals." These stocks rallied violently due to a large fund rotation ("tens of billions wanted out of one group and into another"), ignoring negative fundamental news like Workday's poor guidance. Price action driven by "artifice" rather than business reality is a trap. Do not chase the rally; the price movement is a "puppet" on a hedge fund's string, not a signal of recovery. The rotation into this sector could persist, driving prices higher despite weak fundamentals.

Software stocks are oversold, but the market is questioning their "Terminal Growth Rates" due to AI disruption. While the "death of SaaS" is exaggerated, the market requires proof that these companies can monetize AI agents rather than be replaced by them. Jensen Huang's commentary (that agents will run *on* these platforms) is the bullish thesis, but price action remains weak. WATCH. Likely to be long eventually, but not calling the absolute bottom yet. AI agents bypassing the user interface of these apps, reducing seat-based pricing power.