Workday takeover chatter could mark a turning point for software stocks
Brian Sozzi · Executive Editor
Fri, August 14, 2026 at 2:52 PM GMT+3 2 min read
A big buyout of Workday (WDAY) could send an important signal on software stocks, which have been hammered over the past 12 months.
"We believe that the reported discussions highlights that the terminal risk related to AI for certain enterprise software companies (i.e. those with scale) is potentially overdone," Evercore ISI analyst Kirk Materne wrote in a note on Friday.
Reports surfaced late Thursday that the tech-focused private equity firm Silver Lake has held preliminary discussions in recent months about acquiring enterprise software player Workday. Shares finished yesterday's session up 17.8%.
(WDAY )
198.68 -7.77 (-3.76%)
At close: August 14 at 4:00:00 PM EDT
Prior to the buyout report, Workday had a market capitalization of roughly $43 billion after its stock faced persistent pressure due to investor concerns about artificial intelligence disrupting software. The stock price had fallen by about 25% over the past year prior to the news.
The sluggish stock price performance and mounting AI worries caused Workday co-founder and executive chair Aneel Bhusri to return as CEO in February. He replaced longtime venture capitalist Carl Eschenbach, who stepped down after nearly three years leading the company through a reorganization and a pivot toward more AI tools.
If the deal happens, it would be one of the largest private equity software buyouts in history.
It would also fire a shot back at "SaaSpocalypse" believers.
The term "SaaSpocalypse" refers to the market disruption and sharp sell-offs across traditional software-as-a-service (SaaS) stocks driven by fears that artificial intelligence will undermine recurring revenue business models.
Concerns have crushed the stocks of former software highfliers like Salesforce (CRM), ServiceNow (NOW), and DocuSign (DOCU).
But at some point — and maybe that is now — top names in the space could be viewed as finally too undervalued. It's not like Workday and the aforementioned names haven't pivoted to AI on their own platforms.
"We believe Workday's business is unlikely to be displaced by AI and that becoming a private company could help accelerate its AI transition, eventually driving revenue reacceleration and operating margin expansion," Jefferies analyst Brent Thill wrote in a note today.
Brian Sozzi is Yahoo Finance's Executive Editor, host of the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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