Silver Lake’s potential buyout of Workday, a human-resources and financial management software company, could bolster battered software valuations by showing that private equity remains confident in the industry’s prospects despite fears of AI disruption, analysts and investors said.
Market Impact
Shares of Workday soared nearly 18% after Reuters exclusively reported about its acquisition talks with Silver Lake, which pushed its market value to more than $51 billion. The enthusiasm provided some relief to a sector hammered this year by fears that AI tools capable of generating computer code and creating applications could erode the need for software services.
Strong recent earnings from the likes of ServiceNow have also highlighted the staying power of software companies embedded in key functions such as human resources, customer relationship management and finance, where changing systems can be costly and disruptive. A Workday acquisition will validate the view that it has a strong moat and large opportunity to automate the back-office that can be unlocked over time, Morgan Stanley analysts said.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
