We recently compiled a list of the 11 Best Enterprise Software Stocks to Invest In.In this article, we are going to take a look at where Workday Inc. (NASDAQ:WDAY) stands against the other enterprise software stocks.
Enterprise software comprises applications designed for large organizations, which enable them to manage functions like data analysis, sales, marketing, and customer service. These solutions prioritize scalability, high user capacity, and seamless integration with existing systems. Grand View Research reported that the global enterprise software market is valued at $263.79 billion as of 2024 and is expected to expand at a 12.1% compound annual growth rate from 2025 to 2030. North America accounted for 41% market share of the global enterprise software industry in 2024.
Key trends such as Industry 4.0, digitization, and the rise of connected devices add to the demand for automated and integrated solutions. The shift towards hybrid work models has increased enterprise software adoption in sectors like healthcare and education. In healthcare, enterprise software enhances hospital management and electronic health records. Data safety and privacy are vital market drivers as organizations prioritize protecting sensitive information and comply with GDPR and HIPAA regulations.
Cloud-based enterprise software is expected to dominate the market share by over 55% in 2024 due to its accessibility and affordability, while on-premise solutions will gain traction as organizations seek enhanced customization and data security. Large enterprises accounted for over 62% of the market share, driven by the need to manage complex workflows efficiently. The IT & Telecom sector led with over 20% market share in 2024.
On December 11, Liz Young Thomas, SoFi’s head of investment strategy, and Angela Mwanza, Rockefeller Global Family Office private advisor, joined CNBC’s ‘Closing Bell’ to discuss their market outlooks and address the recent performance of tech stocks. Mwanza expressed a strong bullish outlook for the software sector as they approach the new year. She noted that while mega-cap tech stocks are highly valued, this does not indicate that they are overvalued. She suggested rebalancing portfolios to reduce concentration in these large-cap names while recognizing their growth potential. She highlighted that over the last 6 months, the MAG7 stocks have lagged behind the broader S&P 500, indicating a market broadening that could favor software investments.
Thomas supported this bullish sentiment by emphasizing the resilience of software stocks amid recent volatility in momentum stocks, particularly high-growth names. Despite some mega-cap stocks seeing dramatic year-to-date increases, some up to 900%, others have struggled. Looking into 2025, Thomas predicted uneven performance within the tech landscape and advised investors to focus on software companies. She expressed a stronger bullish sentiment towards this segment, suggesting that software stocks are well-positioned for continued growth as they head into the new year.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top enterprise software stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
20 Strategies for Financial Freedom and Retire Early
A group of finance professionals analyzing market trends on their computer screens.
Number of Hedge Fund Holders: 84
Workday Inc. (NASDAQ:WDAY) provides cloud-based enterprise applications and specializes in human capital management (HCM) and financial management solutions. Its cloud-based platform offers applications for various HR functions, such as talent acquisition, performance management, and payroll, as well as financial functions, including financial planning and analysis, accounting, and procurement.
Over 30% of customer expansions in the company in FQ3 2025 involved AI. For instance, Recruiter Agent, a task-automating agent, saw a massive quarter with new logo closures surpassing any previous quarter in its 12-year history. It’s boosting the average selling price of core recruiting solutions by almost 150%. Talent Optimization experienced up to a 39% reduction in turnover. Workday Assistant, the AI-powered copilot, is being used by over 2,000 HCM customers, improving efficiency and reducing HR case volumes by nearly 30%.
This AI-driven growth contributed to 16% subscription revenue growth and 16% total revenue growth in Q3. This demonstrates the impact of AI across various aspects of Workday Inc.’s (NASDAQ:WDAY) business, highlighting key products and customer successes. It positions AI as the primary driver of growth for the company.
Polen Focus Growth Strategy stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q3 2024 investor letter:
“We added to several existing positions in the quarter including Adobe, Workday, Inc. (NASDAQ:WDAY), Shopify, MSCI, and Paycom Software. Workday is still growing revenue at a mid-to-high-teens rate, but in recent years, slower macroeconomic growth has made closing deals more challenging. Amidst a pullback, we increased our position as we found the valuation attractive for a well-positioned, recurring revenue business with still strong growth potential. The company also recently stated publicly that it will be focused on expanding profit margins meaningfully over the next five years—something we have expected and are pleased to see.”
Overall WDAY ranks 6th on our list of the best enterprise software stocks to invest in. While we acknowledge the potential of WDAY as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WDAY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
