SUNNYVALE, Calif. – Google (NASDAQ:GOOGL) Cloud has expanded its partnership with Workday, Inc. (NASDAQ: NASDAQ:WDAY), to incorporate new generative AI capabilities into the Workday Extend application development platform. This collaboration aims to provide developers with advanced tools to create and manage applications more efficiently.
The integration of Gemini models and Vertex (NASDAQ:VRTX) AI into Workday Extend will offer AI-powered code generation, troubleshooting, and natural language processing to developers. This enhancement is designed to improve the quality and speed of app deployment on the Workday platform, enabling customers to swiftly develop applications for evolving business requirements, such as new purchase requisition workflows and onboarding processes.
Shane Luke, Vice President of Product and Engineering and Head of AI and ML at Workday, stated, "Thousands of developers use Workday Extend to innovate on the Workday platform and to rapidly build apps that help organizations adapt to fast-changing needs." He emphasized that the expanded partnership will allow users to leverage Gemini AI models to further accelerate innovation.
Stephen Orban, VP of Migrations, ISVs, and Marketplace at Google Cloud, highlighted the importance of Workday in managing critical finance and HR functions for enterprises. He noted that Google Cloud's generative AI would enable more efficient information retrieval and analysis from the Workday platform, including faster development of new applications.
Additionally, Workday solutions are now accessible on Google Cloud Marketplace, offering Google Cloud and new Workday customers a streamlined purchasing experience, including the benefit of consolidated billing and the potential for cost reductions by applying purchases towards existing Google Cloud commitments.
Google Cloud provides a suite of AI, infrastructure, and development tools designed to support organizations in their digital transformation efforts. With customers in over 200 countries and territories, Google Cloud positions itself as a trusted technology partner for businesses looking to leverage the cloud for innovation and growth.
This news is based on a press release statement from Google Cloud.
In other recent news, Workday, a prominent provider of enterprise cloud applications for finance and human resources, has seen a series of revisions in its stock price targets from various analyst firms. BofA Securities cut the price target from $310 to $275, citing Workday's potential to continue gaining share in the $188 billion ERP market. KeyBanc also reduced its price target from $330 to $275, acknowledging increased macroeconomic challenges Workday is facing.
TD Cowen followed suit, lowering the target from $330 to $290, despite a $5 million subscription revenue beat and a customer relationship planning order growth that met expectations at 18%. Loop Capital adjusted its target to $240 from $280, reflecting a cautious outlook on the current IT spending environment. Lastly, Baird reduced its target from $316 to $265, following Workday's revenue guidance, which indicates a deceleration due to slower headcount growth among clients and longer decision-making processes.
InvestingPro Insights
As Workday, Inc. (NASDAQ: WDAY) strengthens its partnership with Google Cloud, the financial metrics and analyst sentiment around the company provide a broader context for this strategic move. According to InvestingPro, Workday holds a strong financial position with a market capitalization of $56.1 billion, reflecting its significant presence in the software industry. The company's solid revenue growth is evident from its 17.01% increase in the last twelve months as of Q1 2023, showcasing its ability to expand amidst a competitive landscape.
Investors may find Workday's high P/E ratio of 37.29 intriguing, as it suggests expectations of future growth, supported by the fact that 18 analysts have revised their earnings upwards for the upcoming period—indicating optimism in Workday's financial performance. Additionally, the company's robust gross profit margin of 75.64% in the same period underlines its efficiency in maintaining profitability.
Workday's strategic initiatives, such as the partnership with Google Cloud, could be well-timed, considering the company's stock is trading near its 52-week low and the Relative Strength Index (RSI) suggests that the stock is in oversold territory. For investors and analysts looking to delve deeper into Workday's financials and performance, there are additional InvestingPro Tips available, which can be accessed with an exclusive offer. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking insights that could inform investment decisions during this pivotal phase for Workday.
With 15 additional InvestingPro Tips listed for Workday, including insights on valuation multiples and profitability, investors have a wealth of information at their fingertips to assess the company's market position and the potential impact of its partnership with Google Cloud on its future prospects.
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