Newscasts - Workday hits over 5-year low on weak sales forecast, AI fears

Workday

25/02/2026 18:19

Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_f7jxbt5v&referenceId=tag:reuters.com,2026:newsml_RW858225022026RP1_930&pageId=Newscasts
Source: 'Reuters - Business videos'

Description: A rout in Workday shares resumed on Wednesday after the HR and payroll software maker's soft sales forecast fanned investor worries about whether the firm could stay competitive in the AI era, sending its shares spiraling to a more than five-year low. Lisa Bernhard has more.

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Video Transcript:

Shares of Workday spiraled to a more than five-year low on Wednesday after a weaker-than-expected sales forecast fanned investor worries about whether the HR software company could stay competitive in the era of AI. Workday's recent rout has made it one of the worst-performing US software stocks this year. The drop in shares, down nearly 40% this year, has been fueled by concerns that AI tools launched by companies such as Anthropic would erode demand for traditional software. Workday CEO and co-founder Aneel Bhusri spent a large chunk of the post-earnings call on Tuesday trying to dispel those worries, saying, "just for what it is worth, Anthropic, Google, and OpenAI all run Workday's platform." He added that "no amount of AI-driven coding could replicate complex HR and payroll software." Still, about 26 analysts, more than half those covering the stock, lowered their price targets on the stock after Workday issued a softer-than-expected annual subscription revenue forecast. The company also said some large deals were taking longer to close, particularly in the government and healthcare sectors.