AI Agents Don’t Buy Seats, and That’s Workday’s $133 Stock Problem

Core Insights - Workday's stock has declined 38% year-to-date and 44% over the past year, raising concerns among retail investors about the sustainability of its business model in the face of AI advancements [2][4] - The company's traditional per-seat licensing model is under threat as AI agents replace human workflows, leading to investor uncertainty [3][6] Financial Performance - In Q4 FY2026, Workday reported an EPS of $2.47, exceeding the estimated $2.32, and achieved a 15.7% year-over-year growth in subscription revenue [4][6] - Non-GAAP operating margins improved to 30.6%, up from 26.4% the previous year [4][6] Future Guidance - Workday's guidance for FY2027 subscription revenue is projected between $9.925 billion and $9.950 billion, indicating a slowdown in growth that disappointed investors [4][6] - The market was expecting evidence of accelerated growth driven by AI, which was not provided in the guidance [4][6] Market Sentiment - Investor sentiment on Reddit has turned bearish, with a sentiment score of 33, reflecting concerns over the company's future prospects [2][5] - The narrative of a "SaaSpocalypse" is influencing market perceptions, as investors fear that AI could render seat-based software obsolete [3][5]