Jim Cramer Compares Enterprise Software Dynamics in Workday and ServiceNow

Jim Cramer Compares Enterprise Software Dynamics in Workday and ServiceNow

Syeda Seirut Javed

Tue, August 11, 2026 at 7:52 PM GMT+3 3 min read

• NOW -0.67%
• WDAY -1.38%

During Mad Money's episode aired on August 3, host Jim Cramer spotlighted Workday, Inc. (NASDAQ:WDAY) after the enterprise software firm surged 31% in July, placing it among the top four gainers in the S&P 500 for the month. Cramer highlighted how Workday began reclaiming ground after extended selling pressure tied to artificial intelligence concerns. He stated:

Fourth best performer in July was Workday, up 31%. Now, this is an enterprise software stock that's also been hammered by the AI displacement trade, and it's still down nearly 50% from its peak in early 2024. Now, we know ServiceNow reported and roared when we saw those new numbers. It was just a couple of weeks ago. Workday could do the same thing if its numbers impress us later this month.

As Cramer detailed, July's impressive 31% gains represent an initial step toward recovery for a stock that remains down over 40% from its early 2024 highs. Wall Street's fear that generative AI technologies would reduce demand for traditional software platforms severely weighed on Workday, Inc.'s (NASDAQ:WDAY) valuation over the past quarters. However, recent quarterly results across the broader cloud software sector suggest enterprise software platforms may be positioning themselves as major distribution channels for corporate AI applications rather than victims of replacement.

Enterprise HR and Finance Cloud vs. IT Workflow Automation: Workday and ServiceNow

While Workday, Inc. (NASDAQ:WDAY) and ServiceNow, Inc. (NYSE:NOW) both serve Fortune 500 software requirements, their underlying platform architectures target distinct enterprise operations. Workday operates as the central repository for core human capital management, payroll, and financial planning operations. Its core platform handles sensitive employee records, executive organizational charts, and corporate ledgers, creating exceptionally deep customer retention and high switching costs across enterprise clients.

On the other hand, ServiceNow, Inc. (NYSE:NOW) focuses primarily on IT service management, digital workflow orchestration, and customer service automation. While ServiceNow automates cross-departmental tasks across enterprise IT infrastructure, Workday, Inc. (NASDAQ:WDAY) controls the foundational system of record for workforce and financial data. Rather than competing head-to-head, both platforms serve significant, non-overlapping functions within enterprise software systems. Workday's launch of specialized AI tools and agent integration frameworks within its HR and finance platform aims to capture similar enterprise AI spending momentum as ServiceNow.

Hedge Fund Ownership Falls as Short Interest Remains Elevated

Hedge funds pulled back from Workday, Inc. (NASDAQ:WDAY) early in the year. According to 13F tracking from Insider Monkey, hedge fund ownership dropped to 63 funds in Q1 2026, down from 70 in the prior quarter. The retreat may be a reflection of active managers stepping to the sidelines to avoid choppy enterprise software guidance and wait for clearer demand signals.

Eagle Capital Management remained the most significant hedge fund holder of the company during the quarter with 8.7 million shares. However, it is worth noting that the data is from the first quarter, as the second quarter filing is still ongoing.

At the same time, short interest still indicates bearish positioning at 15.63% of float. That double-digit short float may be a reflection of active bets that generative AI will continue to pressure traditional HR and finance software platforms. However, with over 15% of the float sold short, any positive operational beat, similar to ServiceNow's recent report, may trigger a short cover rally.

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