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LivestreamMenuThe potential purchase of payroll platform Workday by private equity firm Silver Lake puts a solid floor under software stocks after the threat of artificial intelligence ran roughshod over the sector earlier this year, investors and analysts say. The possible buyout, first reported by Reuters on Thursday , would be one of the largest software acquisitions ever. Workday shares jumped 18% in reaction, lifting its market value to $51 billion from about $43 billion. WDAY 5D mountain Workday shares over the past five days Software stocks have been on a choppy ascent since April after falling hard over the winter in an AI-driven rout that Wall Street dubbed “Saas-mageddon,” a reference to the cloud-based software as a service business model. But some investors see a potential Silver Lake deal for Workday as a vote of confidence. The report of a potential Workday sale, together with a recent rally in software provider Atlassian , “should help put a floor under the software sector as a whole and may help it to outperform between now and year-end,” Dan Niles, founder of Niles Investment Management, said in a social media post Thursday. “It certainly creates a valuation floor in the space,” Scott Berg at Needham told CNBC Friday. “The next question would be – what other platforms would be able to take on the same narrative of depth and durability? Other large platforms like Salesforce or ServiceNow , or the next tier of companies that have lower valuations today?” IGV YTD mountain IShares Expanded Tech-Software Sector ETF in 2026 Michael Turrin at Wells Fargo said that investors should be on the lookout for more software deals, particularly with companies that keep records for business customers. “We see recent M & A interest as validation of the value of systems of record, and rank deal likelihood as high (with potential for other suitors) given recent market” volatility, Turrin wrote in a Thursday report. Lucky Schreiner, an analyst at DA Davidson, cautioned that there’s still a lot of variability within software businesses, and that the boost from Silver Lake doesn’t apply across the board. “There are still lower quality software names that should not be up on the reports of Workday being in talks with Silver Lake,” Schreiner told CNBC. Another way to view any Silver Lake talks with Workday is not so much as a vote of confidence in software sector as a sign of weakness in private equity, said David Siffringer, head of equity research at Cantor Fitzgerald. “The PE put is back!,” he wrote to clients Friday, saying the view was “partly in jest.” But whatever the final interpretation, the “news further buoys valuations as it signals PE remains interested in the sector,” Siffringer said.Read More
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