Top 10 Stocks to Buy According to Eagle Capital Management

6. Workday, Inc. (NASDAQ:WDAY)

Number of Hedge Fund Holders as of Q4: 89

Eagle Capital Management’s Equity Stake: $1.42 Billion 

Workday, Inc. (NASDAQ:WDAY) is an American on‑demand (cloud-based) financial management, human capital management, and student information system software vendor. On February 25, 2025, the company announced its fourth quarter fiscal 2025 earnings; it exceeded financial analyst expectations, reporting earnings per share (EPS) of $1.92 versus the projected $1.78. Moreover, it generated $2.21 billion in revenue, surpassing estimates of $2.18 billion with a 15% year-over-year increase. This growth was driven by a 16% rise in subscription services, fueling strong expansion in its financial offerings. Additionally, Workday, Inc. (NASDAQ:WDAY) achieved a 240-basis point improvement in its adjusted operating margin, reaching 26.4%, which contributed to a 22% increase in EPS. Workday’s impressive performance highlights its effective investment strategy, growing subscriber base, and continued product adoption, reinforcing its strong market position.

For Q5, Workday, Inc. (NASDAQ:WDAY) anticipates $8.5 billion in sales with a 14% growth rate and an adjusted operating gross margin of 28%, surpassing estimates by 210 basis points. The stock has surged over 12% post-market, signaling strong investor confidence and potential for further growth. While volatility has been a factor in recent years, Workday remains focused on sustained profitability, projecting a 14% increase in subscription revenue for fiscal 2026 alongside a 28% operating margin, reinforcing its commitment to balanced expansion and financial strength.

As of Q4 2024, Eagle Capital Management significantly increased its holdings in Workday, Inc. (NASDAQ:WDAY) to over 5.51 million shares, marking a 39% rise from 3.97 million shares in Q3. The fund’s stake in the company is now valued at approximately $1.42 billion. Insider Monkey’s database indicated that 89 hedge funds held stakes in the company at the end of Q4 2024, with a value of nearly $5.56 billion, as opposed to 84 funds in Q3.

Workday, Inc. (NASDAQ:WDAY)’s ability to consistently surpass financial expectations, driven by strong subscription growth and expanding profit margins, underscores its resilience and market leadership in cloud-based enterprise solutions. Additionally, increasing institutional investment reflects strong investor confidence in Workday’s long-term growth potential and financial stability.

Parnassus Growth Equity Fund stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q2 2024 investor letter:

“Within Information Technology, we added Workday, Inc. (NASDAQ:WDAY) and funded it with the sale of Palo Alto Networks. Workday is a category leader serving a large, growing enterprise software market. Despite near-term macro uncertainty across software, we believe Workday is well positioned long term, and key initiatives such as its partnership with other service providers can drive incremental growth over the next few years.”