Workday (WDAY) Stock Forecast & Price Target

Workday is benefiting from accelerating AI adoption, with about 25% of core customers using one or more AI SKUs versus 10% in the prior year and roughly 900 customers already buying at least one agent, supporting an average ARR uplift of about 12%. Its AI monetization path looks increasingly credible as AI ARR approaches $600M, while products like Extend AI, HiredScore, Paradox, and Sana each exceed or near $100M in ARR and are expanding use cases across HCM and financials. Management’s FY28 targets of about 11% subscription revenue growth and at least 33% non-GAAP operating margin, alongside a large $170B+ TAM and less than 25% Global 2000 penetration, suggest substantial runway for durable growth and margin expansion.

Workday is facing a cautious demand backdrop as customers adopt AI and agentic products more slowly than expected, delaying near-term revenue contributions and limiting the company’s ability to monetize its strategy quickly. Channel checks also suggest HR budgets may lag broader Enterprise IT spending, while Flex Credits create pricing uncertainty and sales friction that slows agent adoption despite interest in the functionality. At the same time, intensifying competition from Oracle and a challenging macro environment could pressure growth, with downside cases pointing to low-double-digit deceleration, $11,300M FY28 revenue, and $3,290M of FY28 FCF.