Here's Why ClearBridge Large Cap Growth Strategy Exited Its Position in Workday (WDAY)

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities continued their upward journey in the third quarter with the S&P 500 Index surging 8.1% and tech-heavy Nasdaq Composite rising 11.2% to record highs. Investor optimism was driven by favorable tariff results, the One Big Beautiful Bill in July, expected interest rate cuts, and strong corporate earnings, particularly in technology and the Magnificent Seven. The benchmark Russell 1000 Growth Index rose 10.5% for the quarter. The strategy delivered solid absolute performance in the quarter but underperformed the benchmark. Underexposure to perceived AI winners and holding several names deemed by investors to be AI losers led to the underperformance. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy highlighted stocks such as Workday, Inc. (NASDAQ:WDAY). Workday, Inc. (NASDAQ:WDAY) is a technology company that offers enterprise cloud applications. The one-month return of Workday, Inc. (NASDAQ:WDAY) was 2.18%, and its shares gained 0.59% of their value over the last 52 weeks. On October 3, 2025, Workday, Inc. (NASDAQ:WDAY) stock closed at $236.48 per share, with a market capitalization of $63.14 billion.

ClearBridge Large Cap Growth Strategy stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its third quarter 2025 investor letter:

"We exited positions in Workday, Inc. (NASDAQ:WDAY) and Accenture, lowering our exposure to application software providers given decelerating fundamental growth and growing risks around AI. Workday continues to see core organic growth slow, particularly in the human capital management segment, and has yet to develop a comprehensive suite of AI tools needed to support pricing and incremental growth opportunities."

Workday, Inc. (NASDAQ:WDAY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 76 hedge fund portfolios held Workday, Inc. (NASDAQ:WDAY) at the end of the second quarter, compared to 85 in the previous quarter. In the fiscal second quarter of 2026, Workday, Inc. (NASDAQ:WDAY) reported total revenue of $2.348 billion, representing a growth of 13% year-over-year. While we acknowledge the potential of WORKDAY, INC. (NASDAQ:WDAY) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Workday, Inc. (NASDAQ:WDAY) and shared the list of best American stocks to buy and hold for the next 3 years. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.