Workday (WDAY) Just Had its Best Trading Day in a Decade. Here’s Why Silver Lake Wants In

Workday (WDAY) Just Had its Best Trading Day in a Decade. Here’s Why Silver Lake Wants In

Fatima Gulzar

Fri, August 21, 2026 at 2:53 AM GMT+3 3 min read

• WDAY +1.36%

On August 13, 2026, Workday, Inc. (NASDAQ:WDAY) shares jumped nearly 18%, their best single-day performance in 10 years. This happened after Reuters reported that private equity firm Silver Lake is in talks to acquire the human-resources and financial-management software company in a deal that would rank among the largest software buyouts in history.

Why This Matters

AI fears have pummeled software stocks all year, with Workday down more than 40% from its 2024 peak before this report.

That raises the real question: does a Silver Lake buyout prove Workday's business is actually undervalued, or is this just one beaten-down stock catching a single day of relief?

The Bull Case

Trading was halted multiple times as shares surged, pushing Workday, Inc. (NASDAQ:WDAY)'s market value to roughly $51 billion from about $43 billion before the report, an increase of nearly $8 billion in a single session. Silver Lake has a track record with major tech buyouts, including Dell Technologies, VMware, and Qualtrics, and could bring in additional investors the way it did pairing with Saudi Arabia's Public Investment Fund and Affinity Partners on its roughly $55 billion take-private of Electronic Arts last year.

Analyst Brent Thill said CEO Aneel Bhusri and Silver Lake's Egon Durban "know each other well through many connections," a relationship that could help a deal come together. Zacks Investment Research's Brian Mulberry said a completed deal "would be one of the strongest pieces of evidence yet" that public markets overshot in discounting software because of AI.

Workday itself posted better-than-expected results in May and raised its forecast on AI tailwinds and already serves more than 11,500 customers, including Netflix, U.S. Bank, and Johns Hopkins University.

The Bear Case

Nothing is confirmed, talks are ongoing, and sources cautioned there's no guarantee a deal materializes. Workday, Inc. (NASDAQ:WDAY) shares had fallen about 15% this year and more than 40% from their 2024 peak before this report, showing real, sustained investor doubt about whether AI will erode demand for traditional HR and finance software. Revenue growth has also already slowed, from 16% two years ago to 13% in fiscal 2025. Private equity firms have largely stayed on the sidelines of large software buyouts this year specifically because AI makes it harder to judge software companies' future value, meaning a Workday deal would be a major, unproven test of that appetite.

Cantor Fitzgerald's David Siffringer offered a more skeptical read, joking that "the PE put is back," indicating the talks may say more about private equity's own deal pipeline than genuine confidence in software.

Insider Monkey's Hedge Fund Data

Workday, Inc. (NASDAQ:WDAY) was held by 63 hedge funds as of Q1 2026, down from 70.

Conclusion

Silver Lake's interest is a real vote of confidence in Workday's underlying business. Nonetheless, until a deal is signed, the stock's move shows hope about a takeover, not certainty about one.

While we acknowledge the potential of WDAY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.