Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: Workday’s Shares Plummet Amid AI-Driven Market Challenges in Simple Termsand what it means for users..
Shares of Workday tumbled after a cautious sales forecast, stoking fears about the company’s ability to compete in a market increasingly influenced by artificial intelligence. The HR and payroll software firm’s stock hit a five-year low, falling 8.3% in early trading, contributing to a nearly 40% decline this year.
CEO Aneel Bhusri, who recently reassumed his role, attempted to allay investor anxiety by emphasizing Workday’s AI investments. Bhusri pointed out that major companies like Anthropic and Google still rely on Workday, asserting the complexity of HR and ERP systems goes beyond simple AI solutions. However, over 26 analysts revised their price targets downward following the company’s softer subscription revenue projection.
Workday has faced delays in closing major deals, especially in the government and healthcare sectors, amid increased scrutiny of metrics in an AI-conscious market climate. Analysts suggest a general slowdown in hiring and AI-induced layoffs may further dampen demand for HR tools. Meanwhile, broader software sector struggles are evident as the S&P 500 Application Software Index has decreased 29% year-to-date.