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 focusing on 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 potentially take over up to 80% of common user operations by the end of 2025 – providing a productivity boost of up to 20%.
- Further Improvements: A new action bar (supported by WalkMe) and integration with Microsoft 365 Copilot will further enhance the user experience.
Analyst Estimates
Price Target Raised
- New Price Target: Warburg Research has raised the price target for SAP to 295 euros.
- Potential: The potential for further price gains is considered significant, especially if the Q2 numbers exceed expectations again.
- Current Status: With a current price around 267 euros, the stock is just below the year’s high (280 euros). The Relative Strength Index (RSI) indicates overbought conditions in the short term, but the fundamentals continue to support a positive sentiment.
Market Perspective
Expectations for Q2
- Expectations are high: Should the results on July 22 significantly outperform expectations again, a new all-time high could be within reach.
- The cloud sector remains the most important growth driver; in the first quarter, a revenue growth of +12% was already achieved.
Conclusion
SAP is currently benefiting particularly from the trend towards digitization and automation of large enterprises. 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 release date of Q2 numbers and medium/long term through the expansion of the cloud business and the deployment of state-of-the-art technologies.