The Workday Inc. pop-up pavilion ahead of the World Economic Forum (WEF) in Davos, Switzerland, on Saturday, Jan. 19, 2025.

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Shares of software maker Workday slid nearly 8% on Wednesday as analysts lowered their price targets, citing a lack of a upside after the company revised its full-year subscription revenue forecast.

Many software stocks have been under pressure in 2025 as commentators have worried that generative artificial intelligence tools that can quickly write lines of code might pose risks to incumbents.

This year, Workday has announced the launch of several AI agents and expanded its offerings through startup acquisitions. Earlier this month, Workday completed the $1.1 billion purchase of AI and learning software company Sana.

Despite those moves, Workday’s third-quarter earnings report on Tuesday failed to impress Wall Street.

The company called for $8.83 billion in subscription revenue for the fiscal year that will end in January 2026, implying 14.4% growth, but the figure was up just $13 million from the company’s guidance in August. The new number includes contributions from Sana and a contract with the U.S. Defense Intelligence Agency, Workday finance chief Zane Rowe told analysts on a conference call.

“Investors were likely looking for more of a beat-and-raise quarter,” Cantor Fitzgerald analysts Matt VanVliet and Mason Marion wrote in a note to clients. They have the equivalent of a buy rating on Workday stock. The new number, they wrote, “borders on a slight guide down.” The analysts held their 12-month price target on Workday stock at $280.

Stifel, with a hold rating on the stock, lowered its Workday target to $235 from $255.

“It does not appear that the underlying momentum of the business is showing any signs of stabilization,” Stifel’s Brad Reback and Robert Galvin wrote in a note.

Reback and Galvin said Workday implied that growth from its 12-month subscription revenue backlog will continue to slow when removing impact from acquisitions. They expect the trend to continue even as customers sign up for Workday’s AI products, they wrote.

The outcome was “like turkey without the gravy,” Evercore analysts, with the equivalent of a buy rating on the stock, wrote in the title of their note.

Analysts at RBC, which also has the equivalent of a buy rating on Workday shares, lowered their price target to $320 from $340. Despite the mixed guidance, they wrote in a note to clients, results for the fiscal third quarter did exceed consensus. Plus, AI products contributed over 1.5 percentage points of annualized revenue growth, Workday CEO Carl Eschenbach said on Tuesday’s conference call.

‘”We remain encouraged by early AI momentum,” the RBC analysts wrote.

WATCH: AI will drive the market higher in 2026, says Citizens’ Mark Lehmann

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The Applied Materials logo on Dec. 17, 2024.

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Applied Materials shares sank more than 10% in extended trading Thursday as the semiconductor equipment company provided outlook for the current quarter that came in light.

Here’s how Applied Materials did in its third-quarter earnings results versus LSEG consensus estimates:

• EPS: $2.48, adjusted, versus $2.36 estimated.
• Revenue: $7.3 billion vs $7.22 billion estimated.

Applied Materials said it expects $2.11 per share in adjusted earnings in the current quarter, lower than LSEG estimates of $2.39 per share. The company said to expect $6.7 billion in revenue, versus $7.34 billion estimated.

CEO Gary Dickerson said that the current macroeconomic and policy environment is “creating increased uncertainty and lower visibility.” He said the company’s China business is particularly effected by the uncertainty.

The Trump administration’s tariffs could double the price of imported chips unless companies buying them commit to building in the U.S. Applied Materials makes tools for chip foundries to physically make chips, much of which currently happens in Asia.

Applied Materials said that it has a large backlog of pending export license applications with the U.S. government, but that it’s assuming none of them will be issued in the next quarter.

“We are expecting a decline in revenue in the fourth quarter driven by both digestion of capacity in China and non-linear demand from leading-edge customers given market concentration and fab timing,” the company’s finance chief said in a statement. He added that it expected lower China business to continue for several more quarters.

Applied Materials reported $1.78 billion in net income, or $2.22 per diluted share in the quarter, versus $1.71 billion or $2.05 in the year-ago period.

The company’s most important division, semiconductor systems, reported $5.43 billion in sales, topping estimates, and representing a 10% rise from last year.

Applied Materials was praised by President Donald Trump earlier this month after it was included in an Apple program to make more chips in the U.S.

Apple said it would partner with the chipmaker to produce more manufacturing equipment in Austin, Texas.

WATCH: Apple and Trump detail $100 billion U.S. spending expansion: Here’s what to know

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The Synopsys headquarters in Mountain View, California, on April 13, 2022.

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Shares of chip design software makers Cadence and Synopsys tumbled in Wednesday trading after The Financial Times reported that the White House told them to stop selling to clients in China.

Cadence stock declined nearly 11%, while Synopsys was down about 10%.

The Bureau of Industry and Security under the U.S. Commerce Department sent letters to both companies and to Siemens, the newspaper said.

Synopsys declined to comment. Cadence and Siemens representatives did not immediately respond to requests for comment.

The report follows the Trump administration’s decision to get rid of the Biden-era chip “Diffusion Rule” that limited the export of artificial intelligence processors to China.

Nvidia celebrated the change, but it’s not clear how forthcoming policy from the White House might affect Nvidia’s business. Nvidia reports results after the bell on Wednesday.

Earlier this month the Bureau of Industry and Security issued a warning about using Huawei Ascend AI chips, saying organizations that adopt them could be subject to enforcement action.

A spokesperson for China’s Ministry of Commerce said the move undermined the two countries’ preliminary trade agreement and demanded that the White House “correct its mistakes.”

Read The Financial Times’ full report here.

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A Tesla Cybertruck is parked outside of a dealership on November 14, 2024 in Austin, Texas.

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Tesla shares sank more than 8% on Wednesday, notching their steepest drop since before Donald Trump’s election victory last month, which sparked a sharp rally in the stock.

Tesla closed at $440.13, and is still up 75% since Election Day on Nov. 5. Last week, the stock climbed to a record, surpassing its prior high reached in 2021. Ahead of Wednesday’s drop, it had continued going up, closing at a high of $479.86 on Tuesday.

“Most investors we speak to have been stunned by the magnitude of the rally, and are increasingly confused on how to handle the stock given how widely disconnected it appears to be from fundamentals,” analysts at Barclays wrote in a report on Wednesday. They have the equivalent of a hold rating on the stock and a $270 price target.

The pullback coincided with a steep drop in the broader market, including a 3.6% plunge in the Nasdaq, the second-worst day of the year for the tech-heavy index.

Tesla is coming off a 38% rally in November, its best monthly performance since January 2023 and its 10th best on record. CEO Elon Musk was a major Trump backer, pouring in $277 million primarily into his campaign effort, according to Federal Election Commission filings.

Now Musk, the world’s richest person, is set to to lead the Trump administration’s “Department of Government Efficiency,” which is expected to function as an advisory office, alongside onetime Republican presidential candidate Vivek Ramaswamy.

His new role could give Musk, who also runs SpaceX and owns social media company X, influence over federal agencies’ budgets, staffing and the ability to push for the elimination of inconvenient regulations. Musk said during a Tesla earnings call in October that he intended to use his sway with Trump to establish a “federal approval process for autonomous vehicles.”

While Tesla still doesn’t produce robotaxis or operate driverless ride-hailing services, its major domestic competitor Waymo on Wednesday said it conducted over 4 million paid robotaxi trips in 2024 as it scaled its commercial operations in the U.S.

“Tesla is the only Elon Musk company that is publicly traded and it has often served as a proxy for an investment in Musk himself,” the Barclays analysts wrote. “This value has understandably increased, but this further exacerbates the already-high key man risk in Tesla stock, in our view.”

On Wednesday, a Quinnipiac poll found 53% of voters in the U.S. do not approve of Musk “playing a prominent role in the Trump administration.” The split was massive across party and gender lines — only 31% of women surveyed said they approved of Musk taking a big role in the next administration, and only 5% of Democrats approved.

Musk has also complained in recent days that the SEC has issued a “settlement demand” tied to his sale of Tesla shares in 2022 as he was pursuing the purchase of Twitter, now known as X.

A spokesperson for the SEC declined to discuss the matter, telling CNBC that the agency conducts probes “on a confidential basis to preserve the integrity of its investigative process.”

Tesla is due to report its fourth-quarter and year-end vehicle deliveries in January. Without a major new vehicle added to its lineup since Cybertruck deliveries began in November 2023, Tesla has been working to drive sales of its EVs with an array of incentives, like 0% financing.

WATCH: Analyst explains why Tesla’s momentum remains unstoppable

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