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Workday Inc. (Nasdaq: WDAY) shares jumped more than 8% in early trading Wednesday after activist investor Elliott Investment Management disclosed a stake worth more than $2 billion in the human resources software provider. Unlike typical activist campaigns that push for major changes, Elliott praised Workday’s current leadership team and endorsed the company’s multi-year strategy unveiled at its recent Financial Analyst Day. The investment comes as Workday trades at $237.36, up $18.35 (+8.38%) as of 11:37 AM EDT, representing a significant bounce for a stock that had declined 15% year-to-date before today’s surge.

Elliott Invests $2B and Endorses Workday’s Multi-Year Strategy

Elliott Investment Management, known for its activist approach to underperforming companies, took an unusually supportive stance with its Workday investment. The firm stated that CEO Carl Eschenbach, CFO Zane Rowe, and the entire Workday team “have made substantial progress in recent years, positioning Workday as a unique software franchise with industry-leading growth potential, best-in-class customer retention, and a proven management team.” This endorsement represents a departure from Elliott’s typical playbook of demanding significant operational changes.

The activist investor expressed confidence in Workday’s Financial Analyst Day strategy, which focuses on enhancing the company’s operating model and capital allocation framework. Elliott noted it was “pleased with our dialogue with the team” and believes the plan will deliver strong long-term value for shareholders. The investment firm’s backing appears to validate management’s approach to competing in the increasingly competitive enterprise software market.

Alongside Elliott’s stake disclosure, Workday’s board authorized an additional $4 billion share buyback program, bringing total planned repurchases to approximately $5 billion of Class A common stock through fiscal 2027. The company also announced strategic partnerships with Microsoft and revealed plans to acquire AI company Sana for $1.1 billion, demonstrating its commitment to artificial intelligence integration across its platform.

Workday Shares Rally to New Highs as Investors Regain Confidence

Workday shares opened at $235.39 and reached an intraday high of $240.63, with heavy trading volume of over 6.2 million shares compared to its average daily volume of approximately 3 million. The stock had been under pressure in 2025, declining 15% year-to-date before Wednesday’s rally, significantly underperforming the broader S&P 500’s 12.20% gain. With a market capitalization of $63.4 billion and trading at a trailing P/E ratio of 110.50, Workday commands a premium valuation typical of high-growth enterprise software companies.

The company’s financial metrics reflect its position as a mature SaaS provider with strong cash generation capabilities. Workday reported $8.96 billion in trailing twelve-month revenue with a healthy 6.51% profit margin and $2.46 billion in levered free cash flow. The enterprise value-to-revenue multiple of 6.03 and forward P/E of 25.25 suggest investors are paying for continued growth in the competitive human capital management software space.

Analysts maintain a generally positive outlook on Workday, with an average price target of $280.80, representing significant upside potential from current levels. The combination of Elliott’s endorsement, the substantial buyback program, and strategic AI investments through the Sana acquisition appears to have renewed investor confidence in the company’s long-term growth trajectory and competitive positioning against rivals like ServiceNow and other enterprise software providers.

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