NEW YORK — Workday (WDAY) shares rose 19.9 percent Thursday, their best single-day performance since 2016, after reports that private equity firm Silver Lake is in discussions to acquire the human resources software maker.
The rally added $8.6 billion to Workday's market capitalization, bringing its total market value to nearly $51 billion.
Talks between Workday and Silver Lake have been ongoing for several months, according to reports. Aneel Bhusri, Workday's co-founder, returned as CEO in March after Carl Eschenbach stepped down. Bhusri and Silver Lake's Egon Durban have an existing relationship, which analysts say makes a deal more likely.
Jefferies analyst Brent Thill said the software sector has been "badly hit," suggesting an acquisition could make sense at current valuations.
Workday shares were down 7 percent year over year before Thursday's move. Concerns that artificial intelligence tools could disrupt traditional software business models have weighed on the stock.
The company reported better-than-expected earnings in May and raised its full-year forecast, citing AI adoption as a tailwind — a signal that AI's effect on Workday's business is more complicated than the bear case suggests.
Neither Workday nor Silver Lake has issued a public statement on the reported talks.
The Nasdaq Composite rose 0.8 percent Thursday, closing at 16,803.
