Workday shares surge 18% after report of Silver Lake acquisition talks
Workday stock jumped nearly 18% following reports that private-equity firm Silver Lake is negotiating a purchase, while the company continues to address concerns about AI's impact on its business.
Workday Inc. shares rose almost 18% in afternoon trading, marking the company's strongest session since 2016, after Reuters reported that private-equity firm Silver Lake is in discussions to acquire the human-resources software provider. The stock was halted several times before closing with a market value close to $51 billion.
The potential deal has been under consideration for months, according to sources familiar with the matter. Neither Workday nor Silver Lake responded to requests for comment.
Analysts have noted that worries about artificial-intelligence tools disrupting the software sector have pressured Workday’s share price in recent months. An acquisition could signal renewed investor confidence in the software market despite those concerns.
The company’s stock has recovered from a recent sell-off but remains down about 7% on a year-to-date basis. In March, co-founder Aneel Bhusri was reinstated as chief executive after Carl Eschenbach stepped down, and Bhusri has previously served in various leadership roles, including CEO and co-CEO.
"Aneel Bhusri, the CEO, and Egon Durban from Silver Lake know each other well through many connections. So we think certainly this could make sense, and I think this goes back to how badly hit software's been," analyst Brent Thill told CNBC’s "Power Lunch."
Workday reported better-than-expected earnings in May and raised its outlook, citing AI-related growth opportunities.