Workday (WDAY) Just Got Downgraded—Here’s Why Analysts Are Worried About AI

Workday, Inc. (NASDAQ:WDAY) is one of the Trending AI Stocks on Wall Street. On July 10, Piper Sandler analyst Brent Bracelin downgraded the stock from “Neutral” to Underweight with a price target of $235.00. The rating downgrade follows major changes in CIO spending priorities driven by artificial intelligence.

“Our latest CIO survey reinforced a bullish spending backdrop for AI infrastructure while elevating risks to the broader application category,” analysts wrote.

Concerns regarding declining application software spending and potential pricing pressures were noted as factors particularly behind the downgrade for Workday.

“Per employee pricing risk coupled with eroding appetite to invest materially in applications could further pressure growth at WDAY.”

Workday (WDAY) Just Got Downgraded—Here’s Why Analysts Are Worried About AI

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The firm believes that Workday may be a “potential AI casualty on headcount drag,” with 52% of CIOs expecting AI to reduce staff, up from 39%. Since the company’s software helps enterprises manage workforces, a “headcount drag” related to AI may prove to be negative.

Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications.

While we acknowledge the risk and potential of WDAY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WDAY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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