Shares of software maker Workday dropped as much as 10% on Wednesday as analysts lowered their price targets, citing a lack of a upside after the company revised its full-year subscription revenue forecast.

Many software stocks have been under pressure in 2025 as commentators have worried that generative artificial intelligence tools that can quickly write lines of code might pose risks to incumbents.

This year, Workday has announced the launch of several AI agents and expanded its offerings through startup acquisitions. Earlier this month, Workday completed the $1.1 billion purchase of AI and learning software company Sana.

Despite those moves, Workday’s third-quarter earnings report on Tuesday failed to impress Wall Street.

The company called for $8.83 billion in subscription revenue for the fiscal year that will end in January 2026, implying 14.4% growth, but the figure was up just $13 million from the company’s guidance in August. The new number includes contributions from Sana and a contract with the U.S. Defense Intelligence Agency, Workday finance chief Zane Rowe told analysts on a conference call.

“Investors were likely looking for more of a beat-and-raise quarter,” Cantor Fitzgerald analysts Matt VanVliet and Mason Marion wrote in a note to clients. They have the equivalent of a buy rating on Workday stock. The new number, they wrote, “borders on a slight guide down.” The analysts held their 12-month price target on Workday stock at $280.

Stifel, with a hold rating on the stock, lowered its Workday target to $235 from $255.

“It does not appear that the underlying momentum of the business is showing any signs of stabilization,” Stifel’s Brad Reback and Robert Galvin wrote in a note.

Reback and Galvin said Workday implied that growth from its 12-month subscription revenue backlog will continue to slow when removing impact from acquisitions. They expect the trend to continue even as customers sign up for Workday’s AI products, they wrote.

The outcome was “like turkey without the gravy,” Evercore analysts, with the equivalent of a buy rating on the stock, wrote in the title of their note.

Analysts at RBC, which also has the equivalent of a buy rating on Workday shares, lowered their price target to $320 from $340. Despite the mixed guidance, they wrote in a note to clients, results for the fiscal third quarter did exceed consensus. Plus, AI products contributed over 1.5 percentage points of annualized revenue growth, Workday CEO Carl Eschenbach said on Tuesday’s conference call.

‘”We remain encouraged by early AI momentum,” the RBC analysts wrote.

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