Workday Inc (NASDAQ:WDAY) stock is surging today, up 8.6% at $237.92 at last glance, after activist investor Elliott Investment Management unveiled a $2 billion stake in the software name and showed support for the company's leadership. Plus, Workday announced a $4 billion share buyback, just one day after announcing its acquisition of AI firm Sana for roughly $1.1 billion.
In response, Piper Sandler upgraded the stock to "neutral" from "overweight," while Guggenheim upped its rating to "buy" from "neutral." Meanwhile, Evercore ISI lifted its price target to $300 from $275, while TD Cowen slashed its price target to $290 from $310.
Options bulls are chiming in as well, with call volume running at four times the intraday average. The September 240 call is the most popular contract, while new positions are being opened at the 237.50 call in the same series.
An unwinding of long-term pessimism in the options pits could be beginning. WDAY's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than all readings from the last year.
It's also worth noting that short interest has been building, and now represents 4.9% of the stock's available float. It would take shorts nearly four days to buy back their bearish bets, at Workday stock's average pace of trading.
On the charts, today's pop has WDAY breaking above pressure at the 80-day moving average, which has kept a cap on gains since mid-June. Plenty of long-term trendlines still linger above, however, including the 150-day moving average, which the stock touched at its high today, but failed to conquer. Year to date, the equity is down 8.2%.
