(NASDAQ: WDAY) and Monday.com (NASDAQ: MNDY) are both cloud-based software providers that help companies digitally streamline tasks. Workday's human capital management (HCM) platform makes it easier for companies to hire, organize, and pay their workforces while managing their total expenses. Monday.com's platform enables companies to create their own custom work management apps to streamline, accelerate, and automate certain tasks. Those apps can be built from scratch, or through prebuilt "recipes" to be integrated into other productivity software.

Workday and Monday are both benefiting from the digital transformations of older businesses, as well as a desire by newer companies to build digital-native foundations. Those secular tailwinds initially impressed the bulls, and both stocks soared to record highs during the peak of the growth and investor enthusiasm in November 2021.

But both stocks stumbled as macroeconomic headwinds curbed their sales growth and rising interest rates compressed their valuations. That's why Workday and Monday.com now trade 26% and 61% below their all-time highs, respectively. Should investors consider buying either out-of-favor cloud stock as a turnaround play?

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Source Fool.com