Can a New CEO Save Workday Stock from the Software Apocalypse?

Core Viewpoint - Wall Street is worried about the impact of artificial intelligence (AI) on software stocks, leading to a selloff in major companies, including Workday [1][4] Company Overview - Workday specializes in cloud software for human resources and financial management, providing tools for payroll, recruiting, performance tracking, and financial reporting [3] - The company has a market capitalization of $40.3 billion [3] Leadership Changes - CEO Carl Eschenbach previously dismissed concerns about AI disruption but has now stepped down, with co-founder Aneel Bhusri taking over as CEO [2] - Bhusri emphasized that the transformation brought by AI is greater than that of Software-as-a-Service (SaaS) [2] Stock Performance - Workday's stock has seen a significant decline, down 45% over the past 52 weeks and 32% year-to-date, reaching a 52-week low of $142.72 [4] - The stock is currently trading at a forward-adjusted price-to-earnings (P/E) ratio of 28.5 times [6] Financial Results - For Q3 of fiscal 2026, Workday reported total revenues of $2.43 billion, a 12.6% year-over-year increase, surpassing Wall Street's expectations of $2.41 billion [8] - The growth in revenue was primarily driven by increases in subscription services [8] AI Portfolio Momentum - Despite AI-related concerns, Workday's management highlighted the positive momentum of its AI portfolio, contributing over 1.5 points to annual recurring revenue (ARR) growth during the quarter [9]