This is a chart of an exciting but now vulnerable software stock called Workday. This is what they do.
Workday unifies HR and Finance on one intelligent platform with AI at the core to empower people at every level with the clarity, confidence, and insights they need to adapt quickly, make better decisions, and deliver outcomes that matter.
That sounds as though AI is good news for them. But AI thinks differently.
AI poses a threat to Workday’s business model primarily through “seat compression,” where autonomous AI agents perform tasks previously requiring many human administrative users, reducing software licensing revenue. Additionally, AI lowers barriers for competitors to replicate standard HR/payroll tools, while rising concerns over AI bias and litigation create legal risks for Workday’s AI recruiting tools.
Investors are worried about the impact of AI on Workday’s business, and it seems they are right to be worried. The red line averages signalled a sale in June 2025, and an investor following these signals would have sold their holding.
But there is something else interesting about this chart. The best time to hold Workday shares was when the red line was rising steeply. The chart is cluttered with green, yellow and red triangles, but try to forget about them. The time to hold Workday shares is when the red line is rising almost vertically, i.e., when velocity is strongest. That is when you make your long-term trade. Otherwise, you sell the shares and stand aside or, more practically, look for another share to buy with a steeply rising red line.
This can become like a game of musical chairs as we hop from one explosively rising share to another. Nothing is ever that simple, and we need to do more work on this, but I see great potential in this strategy.
