Software stocks in Europe fall on concerns over AI pitfalls
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 12 2025
0mins
Should l Buy WDAY?
Source: Reuters
Software Stock Decline: European software stocks, including SAP, fell sharply due to concerns about the risks posed by artificial intelligence, with SAP experiencing its largest drop since October 2020.
Market Impact: The decline in European tech stocks mirrored similar trends in the U.S., where companies like Adobe and Salesforce also faced selloffs following a report on AI's potential impact on the software industry.
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Analyst Views on WDAY
Wall Street analysts forecast WDAY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for WDAY is 275.19 USD with a low forecast of 235.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
31 Analyst Rating
22 Buy
9 Hold
0 Sell
Moderate Buy
Current: 162.920
Low
235.00
Averages
275.19
High
325.00
Current: 162.920
Low
235.00
Averages
275.19
High
325.00
About WDAY
Workday, Inc. is a provider of an artificial intelligence (AI) platform to help organizations manage their people, money, and agents. The Company provides over 11,000 organizations with cloud solutions powered by AI to help solve business challenges, including supporting and empowering their workforce, managing their finances and spending in an ever-changing environment, and planning for the unexpected. It offers Financial Management, Spend Management, Human Capital Management (HCM), Planning, and Analytics applications. The Company sells its solutions worldwide primarily through direct sales. It also offers professional services, both directly and through its Workday Services Partners, to help customers deploy its solutions. It offers businesses flexible solutions to help them adapt to their industry-specific needs and respond to change. It serves various industries, including professional and business services, financial services, healthcare, education, government, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Job Cuts and Investment: To bolster its investment in technology, Workday cut approximately 1,750 jobs last year; despite Eschenbach's statement highlighting achievements in operational discipline and AI groundwork, the market's reaction remains negative.
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See More
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- Leadership Change: Workday has appointed co-founder Aneel Bhusri as the new CEO, replacing Carl Eschenbach.
- Industry Context: This leadership transition comes amid significant turbulence in the software industry.
See More
Workday Receives Overweight Rating and Price Target
- Rating Upgrade: Workday (WDAY) has received an overweight rating, indicating analysts' optimistic expectations for its future performance, suggesting the company will continue to grow and attract more investor interest.
- Price Target Set: The average price target set by analysts is $267.67, indicating significant upside potential compared to the current stock price, which may stimulate market interest in purchasing the stock.
- Increased Market Confidence: This upgrade and price target enhancement could bolster investor confidence in Workday, potentially driving its stock price higher and further solidifying its position in the cloud computing and human resource management software markets.
- Investor Attention: With analysts' positive evaluations of Workday, it is expected to attract more institutional investor attention, potentially leading to increased capital inflow and improved overall market performance for the company.
See More
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- Market Recovery: The S&P 500 Index rose by 0.46%, the Dow Jones Industrial Average increased by 0.09%, and the Nasdaq 100 climbed by 0.61%, indicating a rebound in the market driven by recovering tech and chipmaker stocks, reflecting investor confidence in economic growth.
- Mining Stocks Surge: Gold prices increased by over 1% and silver prices jumped more than 6%, boosting mining stocks with Coeur Mining up over 6% and Freeport McMoRan up more than 5%, suggesting rising investor demand for precious metals amid inflation concerns.
- Positive Earnings Outlook: Over 79% of S&P 500 companies that reported earnings exceeded expectations, with Q4 earnings growth projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, indicating sustained corporate profitability that could further drive stock market gains.
- Economic Data Focus: The market is closely watching upcoming employment and inflation data, with January nonfarm payrolls expected to rise by 69,000 and the unemployment rate to remain at 4.4%, as these figures will influence investor expectations regarding future monetary policy, potentially leading to market volatility.
See More
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- Tech Stock Retreat: Technology stocks are broadly down today, contributing to a 0.03% decline in the S&P 500, a 0.34% drop in the Dow Jones, and a 0.17% decrease in the Nasdaq 100, reflecting a cautious investor sentiment following last Friday's sharp gains.
- Bond Yield Pressure: Rising US bond yields, with the 10-year T-note yield up 2 basis points to 4.22%, are exacerbated by Chinese regulators instructing banks to reduce their US debt holdings, reviving concerns over the haven status of US assets and potentially impacting investor confidence.
- Earnings Season Insights: More than half of S&P 500 companies have reported earnings, with 79% exceeding expectations, and Q4 earnings growth is projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, indicating resilience in corporate earnings and potential market support.
- Economic Data Focus: The market is set to focus on upcoming economic data, including a projected 0.8% increase in the employment cost index on Tuesday and a 2.5% year-over-year rise in the consumer price index on Friday, which will provide guidance on future economic trends.
See More
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- Kyndryl Stock Plunge: Kyndryl Holdings' shares tumbled 55% following the disclosure of an audit committee review of cash management practices, which not only undermines investor confidence but may also pose greater challenges for future financing and operations.
- Executive Departures Impact: The immediate departure of CFO David Wyshner and General Counsel Edward Sebold indicates potential internal management issues, which could exacerbate market concerns regarding the company's governance structure.
- Cleveland-Cliffs Poor Performance: Cleveland-Cliffs reported a wider-than-expected adjusted EBITDA loss of $21 million, primarily due to weakness in the auto and Canadian markets; although the company anticipates improvements by 2026, it still faces short-term market challenges.
- Valaris Acquisition News: Valaris shares surged 28% after agreeing to be acquired by Transocean for $5.8 billion, with Valaris shareholders set to receive 15.235 shares of Transocean stock for each Valaris share held, reflecting strong demand in the offshore drilling services market.
See More
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- Executive Change: Workday CEO Carl Eschenbach has stepped down immediately, with co-founder Aneel Bhusri taking over; Bhusri's extensive leadership history from 2009 to 2024 indicates a significant shift in the company's direction.
- Market Pressure: Software stocks are under pressure as investors worry about AI's disruptive potential, with Workday's shares dropping 17% last year and over 20% year-to-date, reflecting diminished market confidence in the company's future.
- Job Cuts and Investment: To bolster its investment in technology, Workday cut approximately 1,750 jobs last year; despite Eschenbach's statement highlighting achievements in operational discipline and AI groundwork, the market's reaction remains negative.
- Industry Transformation: Bhusri stated that AI represents a transformation larger than SaaS, which will define the next generation of market leaders, indicating that the company will face new strategic challenges and opportunities ahead.
See More
