This article first appeared on GuruFocus.
Workday (NASDAQ:WDAY) is attempting to reset the AI debate around its business at a moment when investor confidence has been shaken. After a steep selloff that has pushed the shares down about 40% this year, Chief Executive Officer Aneel Bhusri told analysts Tuesday that some of the most closely watched AI companies including Anthropic, Google and OpenAI run on Workday’s systems. At a time when markets have been questioning whether generative AI could erode demand for traditional enterprise software, that detail is being positioned as evidence that AI innovation and core HR platforms may not be mutually exclusive.
The concern weighing on the stock has been straightforward: if AI tools make payroll, human resources and other back-office processes easier, demand for Workday’s applications could be pressured. That skepticism has not been isolated to one name, with peers such as Salesforce Inc. also seeing similar sentiment shifts. Bhusri, a Workday co-founder who returned earlier this month as CEO after stepping down in 2024 as co-CEO while remaining chairman, used much of the company’s earnings call to argue that Workday’s products function as foundational systems rather than optional layers that can be easily displaced.
He described Workday’s HR and ERP offerings as systems of record designed to process transactions with accuracy and speed, enforce complex security models, and comply with statutory and regulatory requirements across multiple jurisdictions. In that framing, lightweight AI-driven development approaches may not be sufficient substitutes for enterprise-grade platforms. Even so, the market reaction was cautious: shares fell 9% in extended trading after the earnings report, suggesting investors may still be weighing how durable Workday’s positioning could be as AI adoption accelerates.
