Fundamental Drivers
Cloud ERP and AI as Growth Engines
- Cloud Revenue: The migration of customers to SAP’s Cloud ERP suite is driving sustained strong revenue growth at double-digit rates.
- AI Innovations: SAP is pursuing a strategic vision with three pillars: AI-driven innovation, process optimization, and data excellence.
- Joule: A generative AI co-pilot integrated into key products like S/4HANA Cloud and SAP Build. Joule translates natural language into actionable tasks and could take over up to 80% of common user operations by the end of 2025—potentially enabling a productivity increase of up to 20%.
- Further Enhancements: A new action bar (supported by WalkMe) and integration with Microsoft 365 Copilot aim to further enhance the user experience.
Analyst Assessment
Target Price Raised
- New Target Price: Warburg Research has raised its target price for SAP to 295 Euros.
- Potential: The potential for further price gains is considered significant, especially if the Q2 figures prove convincing again.
- Current Status: With a current price of about 267 Euros, the stock is just below its yearly high (280 Euros). The Relative Strength Index (RSI) indicates temporarily overbought conditions, but the fundamentals continue to support a positive sentiment.
Market Perspective
Expectations for Q2
- Expectations are high: Should the results on July 22 greatly exceed expectations again, a new all-time high could come within reach.
- The cloud sector remains the most important growth driver; a revenue growth of +12% was already achieved in the first quarter.
Conclusion
SAP is currently particularly benefiting from the trend towards digitization and automation in large corporations. The integration of innovative AI technologies like Joule not only strengthens the core business but also sustainably improves the company’s competitive position. Analysts continue to see significant potential—both in the short term around the publication of Q2 figures and in the medium/long term through the expansion of the cloud business and the deployment of cutting-edge technologies.