12 Best Enterprise Software Stocks to Buy Now

3. Workday Inc. (NASDAQ:WDAY)

Number of Hedge Fund Holders: 89

Workday Inc. (NASDAQ:WDAY) provides enterprise cloud applications through its direct sales organization. Its offerings include financial & human capital management applications, and supply chain & inventory solutions. It offers Workday Extend for customers and their developers to build custom applications; and Workday Illuminate to accelerate manual tasks, assist employees, and transform business processes.

The company serves more than 11,000 customers which include over 60% of the Fortune 500 and 30% of the Global 2000. The company’s primary revenue drivers are its Human Capital Management (HCM) and Financial Management applications, which now use AI for higher efficiency. More than 2,000 customers use both HCM and Financial Management. 30% of the company’s net new wins in Q4 2024 were full-suite deals. The demand for AI-driven solutions is generally increasing. 30% of the customer expansions now involve AI SKUs.

Workday Inc. (NASDAQ:WDAY) is launching role-based AI agents and also the Agent System of Record. The latter product is focused on managing AI agents alongside human workforces. On March 31, Jefferies lowered the company’s price target to $325 from $350 and kept a Buy rating. This came from the broader price target reductions across the US software sector because of the potential macroeconomic headwinds. Jefferies expects a volatile H1 for the company, followed by a relatively stronger H2.

Parnassus Core Equity Fund stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q4 2024 investor letter:

“We also added several new positions, including two in Information Technology: Workday, Inc. (NASDAQ:WDAY), a category leader for enterprise cloud applications for finance and human resources. We believe Workday’s product stickiness and key initiatives such as its partnership with other service providers position the company well for incremental growth over the next few years.”