NEW YORK, August 14, 2026, 08:09 EDT — Shares of Workday, Inc. NASDAQ:WDAY remained close to Thursday’s closing price of $206.45 in premarket trading on Friday after news of acquisition talks with Silver Lake sent the stock up 18%.
Workday shares surged 17.78% on Thursday, boosting its market value by about $8.1 billion. Reuters reported that Silver Lake is in discussions regarding a possible takeover, but a transaction is not certain.
Investors are now focusing on price as well as probability. Applying a typical 25% premium to Workday’s undisturbed value would result in an equity valuation of approximately $53.75 billion, which is nearly the size of Silver Lake’s around $55 billion deal for Electronic Arts Inc. NASDAQ:EA.
| Deal premium to undisturbed price | Implied offer per share | Equity value | Enterprise value | EV/FY2026 free cash flow |
|---|---|---|---|---|
| 20% | $210.35 | $51.60 billion | $50.24 billion | 18.1x |
| 25% | $219.11 | $53.75 billion | $52.39 billion | 18.9x |
| 30% | $227.88 | $55.90 billion | $54.54 billion | 19.6x |
Shares ended Thursday 17.8% above the estimated undisturbed price of $175.29. That means just around 6% potential upside to the midpoint scenario remains, offering a thin buffer should talks break down.
Workday’s cash flow helps ease the deal’s financial demands. As of the end of April, the company held $4.35 billion in cash and marketable securities, compared to $2.99 billion in debt. That left net cash around $1.36 billion.
| Workday operating measure | Latest result | Year-over-year change |
|---|---|---|
| Total revenue for Q1 FY2027 | $2.542 billion | +13.5% |
| Subscription revenue in Q1 | $2.354 billion | +14.3% |
| Subscription backlog for 12 months | $8.806 billion | +15.5% |
| Free cash flow for Q1 | $616 million | +46.3% |
| Free cash flow for FY2026 | $2.777 billion | +26.7% |
Chief Executive Aneel Bhusri stated, “Our core business is strong, our AI strategy is working.” According to Workday, over 4,000 customers are now using at least one of its AI agents, an increase of more than two times compared to the previous quarter. Workday’s first-quarter release
Growth is steady but has moderated compared to the cloud surge. Workday projected fiscal 2027 subscription revenue between $9.925 billion and $9.950 billion, an increase of 12% to 13%. The company aims for a non-GAAP operating margin of 30.5%.
| Analyst or consensus measure | Rating | Price target | Date |
|---|---|---|---|
| 26-analyst consensus | 14 rate Buy / 10 Hold / 2 Sell | $174.96 on average | Past three months |
| Karl Keirstead, UBS | Hold | $220 | Aug. 13 |
| Brent Thill, Jefferies | Hold | $205 | Aug. 13 |
| Patrick McIlwee, William Blair | Buy | Not provided | Aug. 13 |
| Michael Turrin, Wells Fargo | Buy | $215 | Aug. 12 |
| Rishi Jaluria, RBC Capital | Buy | $220 | Aug. 12 |
The closing price was 18% higher than the average analyst target, reflecting how takeover speculation has overtaken most independent valuations. New $220 price targets suggest just around 7% potential gains.
The report led to changes in valuations for related software stocks. HubSpot, Inc. NYSE:HUBS surged 14.46%, and Docusign, Inc. NASDAQ:DOCU climbed 10.31%. Salesforce, Inc. NYSE:CRM was up 4.16%, while ServiceNow, Inc. NYSE:NOW gained 1.85%.
| Software stock | Thursday close | One-day change | Market signal |
|---|---|---|---|
| Workday NASDAQ:WDAY | $206.45 | +17.78% | Direct acquisition candidate |
| HubSpot NYSE:HUBS | $240.51 | +14.46% | Indicator for large-cap cloud sector |
| Docusign NASDAQ:DOCU | $64.09 | +10.31% | Signal for application software group |
| Salesforce NYSE:CRM | $201.37 | +4.16% | Indicator for large-cap software sector |
| ServiceNow NYSE:NOW | $127.25 | +1.85% | Indicator for enterprise software group |
The widespread rally indicates that investors view private-equity interest as setting a valuation floor for the sector. The effect is most notable for firms with recurring revenue, healthy cash flow, and struggling share prices.
Risks: Discussions are at an early stage and could conclude without a bid. Securing funding for a deal exceeding $50 billion might necessitate additional partners, and offering a smaller premium would provide limited gains over Thursday’s closing price. If the process falls through, much of the 18% rise could reverse.
Workday heads into Friday’s session with some of the deal premium already reflected in its share price. Investors must now see proof that a bidder will offer more than $219 per share, or that Workday’s cash-flow growth justifies the valuation on its own.
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