Hotchkis & Wiley Global Value Fund on Workday, Inc.

Hotchkis & Wiley believes the market is overestimating the threat that AI poses to mission-critical systems of record such as Workday. The latest quarter showed subscription revenue growth of 14%, 12-month backlog growth of 16%, industry-leading retention, expanding margins, and unchanged full-year subscription revenue guidance alongside higher operating-margin guidance. Workday's own AI agents were already being used by more than 4,000 customers, suggesting the company can participate in AI adoption rather than simply be disrupted by it. The fund argues that enterprise switching costs and Workday's non-code moat make the business more durable than the market assumes.