What happened

Shares of Workday (WDAY -2.48%) have popped today, up by 9% as of 12:20 p.m. EDT, after a Wall Street analyst released a bullish research note. Enterprise software stocks are also broadly rallying following a blockbuster earnings release from salesforce.com.

So what

Jefferies boosted its price target on Workday from $180 to $195, which was just slightly above yesterday's close and below current prices. "We remain fundamental fans of WDAY's broad product portfolio and believe that spend will inevitably come back as we recover," analyst Brent Thill wrote in a research note to investors. However, the ongoing macroeconomic uncertainty related to the COVID-19 pandemic could impact broader IT spending and lead to delays in inking deals in the short term.

Workday logo on a wall in the lobby of headquarters

Image source: Workday.

Salesforce, which is about to join the Dow Jones Industrial Average next week, reported blowout results yesterday evening, spurring a rally among tech stocks today, particularly those in the same sector of selling critical software to enterprises. That includes Workday, which offers a cloud-based human resources (HR) platform.

Now what

Workday is set to release fiscal second-quarter results tomorrow after the market close. Analysts are expecting the company to report $1.04 billion in sales and earnings per share of $0.66. That sales forecast is mostly in line with Workday's own guidance, which calls for subscription revenue of $913 million to $915 million and professional services revenue of $128 million. CFO Robynne Sisco previously reassured investors that it had "measures in place that help reduce near-term volatility from employment changes."