Workday (WDAY) Stock Forecast & Price Target

Workday is benefiting from strong customer adoption of its AI and agentic platform, with ~25% of core customers using one or more AI SKUs, ~900 customers buying at least one agent, and those AI products lifting ARR by about 12% on average. Its long runway remains compelling because it sits at the center of large enterprise HR and finance workflows, has ~80M users under contract, ~1.4T transactions on platform in FY26, and addresses a >$170B TAM with less than 25% Global 2000 penetration. Management’s reiterated FY28 goals of ~11% subscription revenue growth, 33%+ non-GAAP operating margin, and ~15% SBC as a percentage of revenue support the view that AI monetization, operating leverage, and sticky cloud demand can drive durable compounding.

Workday is facing a negative setup because its AI strategy, while promising, appears too early to drive meaningful near-term revenue, with customer and partner checks showing a measured adoption curve and no clear catalyst for acceleration. HR IT budgets may also be crowded out by broader enterprise AI spending, while Flex Credits create pricing uncertainty and sales friction, limiting monetization of new agentic products even as interest exists. At the same time, competition from Oracle and other large software vendors is intensifying, and management’s own bear-case implies low-double-digit growth, $11,300M revenue, and $3,290M FCF in FY28, suggesting limited upside if execution slips.