Workday stock was surging 8% on Wednesday, after activist investor Elliott Investment Management said it had built a $2 billion stake in the HR software company.

Elliott said in a statement late Tuesday that it had poured more than $2 billion into Workday, while voicing its faith in CEO Carl Eschenbach and CFO Zane Rowe.

The activist investor added that it was confident a multiyear plan outlined by Workday at an analyst day on Tuesday would drive long-term shareholder value.

KeyBanc analyst Jason Celino said Elliott's investment was a "vote of confidence" in Workday, adding that investors should feel reassured by the subscription revenue and operating margin guidance the company issued at Tuesday's analyst day.

Guggenheim analyst John DiFucci raised his rating on the stock to Buy from Neutral, issuing a $285 price target that implies it can rise 23% from its current level. DiFucci added that he sees Workday as "a nice house in a tough neighborhood," meaning it should be well-positioned to rally if IT spending improves.

Shares were also getting a boost from news of a billion-dollar deal. Before Elliott unveiled its stake, Workday said it was acquiring Sana, which develops artificial-intelligence workplace tools, for $1.1 billion.

The company said the acquisition will help it offer AI agents that customers can use to automate repetitive tasks, search data sources, and create presentations and documents.

Workday also said in an 8-K filing that its board had added $4 billion to its stock-buyback program. The company said it plans to buy back about $5 billion worth of its own shares through fiscal 2027.

As of Tuesday's close, the stock was down 15% for the year, sliding amid worries that an uncertain macro environment could drag down IT spending. The S&P 500 is up 12% in 2025.