Workday shares rise 9% on inclusion in S&P 500

working day Shares rose nearly 10% in extended trading on Friday after S&P Dow Jones Indices said the cloud software provider would be added to the S&P 500.

It will be replaced Amentum Holdings effective Dec. 23 on the index, according to a statement.

The index has included a handful of other well-known technology stocks this year, including Dell And Palantir.

Workday was founded in 2005 and is based in Pleasanton, California. The company went public on the New York Stock Exchange in 2012. In 2017, Workday moved to the technology-focused Nasdaq.

In November, Workday said it had net income of $193 million on quarterly revenue of $2.16 billion, up 16% from a year earlier. Sales growth of 14% was required for the 2026 financial year.

Workday reported losses in every fiscal year through 2022. Inflation and higher interest rates reduced investors’ interest in supporting unprofitable companies, and many software executives realized they needed to cut costs.

To be included in the leading US index, companies must show profits in the last quarter and the last four quarters.

In February, Carl Eschenbach, a former VMware operations executive and Sequoia Capital investor, became Workday’s sole CEO after serving as co-CEO since late 2022 with Aneel Bhusri, a co-founder. Workday will release an artificial intelligence agent for creating and submitting expense reports this year, and an agent for identifying inefficiencies in business processes will come to market in 2025, Eschenbach told analysts in a conference call in November.

It’s normal for stocks to rise upon news of their inclusion in a major index, as fund managers need to rebalance their portfolios to reflect index changes.

Although more technology companies have been added to the index, not all of them have proven to be money makers for investors tracking the benchmark. Server manufacturer Great microphone was added to the S&P 500 in March after the stock surged on demand Nvidia-based servers.

Shares peaked shortly thereafter, but then slumped in the following months after the company failed to report its financial results on time. The stock is down about 60% from its peak, and the company said Friday that it had received an extension from Nasdaq to maintain its listing.

Workday has not had to deal with questions about its accounting practices. However, the company faced legal claims over biased AI in its software.

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