Workday's (WDAY) fiscal 2028 growth guidance reflects a delayed payoff from AI investments rather than any softening in customer demand, UBS said in a note Friday.

The firm said Workday described fiscal 2027 as a catch-up year for AI, pointing to a late start and slower-than-expected monetization, especially from usage-based Flex Credits pricing.

UBS said it saw no evidence of demand stress in Workday's commentary, including no signs of longer sales cycles or seat pressure, though its own checks point to a highly penetrated core HR market.

On take-private speculation, UBS said it remains skeptical a deal is being discussed, adding that the CEO, who returned in February, is unlikely to consider a sale so soon into his tenure, and that his declining to comment on the matter does not imply talks are underway.

UBS maintained the company's neutral rating with a price target of $220.

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