Workday and Salesforce Shares Sag on Worries About Potential Demand Slowdown

Enterprise technology spending has held up well as the economy has emerged from the pandemic period, but there are growing concerns that high inflation, soaring interest rates, and fear of recession could trim corporate spending on software in the months ahead.

UBS analyst Karl Keirstead cited macroeconomic factors Tuesday morning in cutting his rating on Workday (ticker: WDAY) shares to Neutral from Buy, with a target of $185 for the price, down from $270. The move comes ahead of the company’s April quarter earnings report, which is scheduled for May 26. The analyst also repeated a Neutral stance on Salesfoce.com (CRM), while cutting his target price to $185, from $225, citing a similar rationale.