DA Davidson Remains Cautious on Workday (WDAY) Amid Market Saturation and Intensifying Competition

With significant hedge fund interest and upside potential, Workday, Inc. (NASDAQ:WDAY) secures a spot on our list of the 15 best AI stocks to watch in December 2025.

On December 2, 2025, Workday, Inc. (NASDAQ:WDAY) saw DA Davidson’s Robert Simmons reiterate his “Hold” rating with a $235 price target. Reflecting mixed signals in the company’s growth trajectory, he pointed toward its Core HCM segment, which is expanding at a slower pace due to market saturation and intensifying competition, despite remaining Workday’s largest revenue driver. Although the Financial Management portfolio and international operations are experiencing rapid growth, the analyst believes they have yet to improve the company’s overall growth profile meaningfully.

At the same time, Simmons highlighted cross-selling and up-selling efforts, which remain strong contributors to bookings. He believes margins are expected to go up, further supporting his price target. However, the analyst noted that Workday, Inc. (NASDAQ:WDAY) remains more expensive than its peers on a revenue multiple basis, justifying his “Hold” rating as he awaits a more compelling entry point.

A week earlier, on November 25, Workday, Inc. (NASDAQ:WDAY) reported its fiscal Q3 2026 results. The quarter saw revenue growth of 12.6%, driven by 14.6% growth in subscription revenue, along with improved operating margins and stronger cash flows. Thanks to new customers, expanded enterprise relationships, and contributions from recent acquisitions such as Paradox, the subscription revenue backlog recorded double-digit growth. While the quarter also featured multiple AI-focused product launches and partnerships reinforcing the company’s innovation pipeline, the analyst’s short-term growth concerns remain unchanged.

Workday, Inc. (NASDAQ:WDAY) offers an enterprise AI platform that manages people, money, and agents.

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