Workday shares soar as Wall Street turns optimistic on AI-driven Q4 earnings beat

Workday shares climbed as much as 10% a day after the cloud-based software giant dropped strong Q4 earnings results. Workday’s revenue jumped 15% to $2.21 billion for the quarter, topping Wall Street’s expectations of $2.18 billion. Adjusted earnings per share also came in well above estimates, hitting $1.92, compared to an expected $1.78. For fiscal 2026, Workday expects $8.8 billion in subscription revenue, reflecting 14% growth and slightly higher than the forecast given in November.

Workday has benefited from its growing focus on AI, which has been increasingly integrated into its popular enterprise solutions business. Workday’s CEO noted that about 30% of its expansions with existing clients in the past quarter involved AI products.

According to the company, the rise of government efficiency initiatives has also created new opportunities for Workday, particularly as the company has ramped up its focus on federal sales over the past year and a half.

Despite Workday shares being down nearly 12% over the past year, its latest results have fueled a surge of optimism on Wall Street. On Wednesday, RBC Capital analysts hiked their price target on Workday shares to $340 from $320, maintaining its outperform rating. Piper Sandler also raised its price target to $290 from the previous $270. Canaccord Genuity raised its target to $330 and kept a buy rating, highlighting Workday’s strong performance and its strategic focus on artificial intelligence.