Free Trial

SAP: AI Tailwinds Accelerating Enterprise Cloud Business

SAP, systems, applications, products symbol. Wooden blocks with words SAP, systems, applications, products. Orange background, copy space. Business and SAP, systems, applications, products concept.

Key Points

  • SAP is a leading global enterprise business software solutions provider benefitting from the boom in AI use cases driving its cloud
  • and software business. 
  • SAP saw 30% of its cloud orders in Q3 were deals that had AI use cases buoyed by its Gen AI Hub.
  •  SAP raised its full-year 2024 mid-point revenue guidance by $433 million.
  • Want stock alerts on SAP? Get 5 Weeks of MarketBeat All Access for $5. Get My Stock Alerts.

Global enterprise software giant SAP SE NYSE: SAP has been scratching at all-time highs as its business gets lifted by artificial intelligence (AI) tailwinds. SAP is an acronym for Systems, Applications, and Products in Data Processing. The company provides cloud-based business software through its flagship enterprise resource planning (ERP) product.

This package integrates a comprehensive and synergistic range of business software, including accounting, human capital management (HCM), customer relationship management (CRM), project management, and procurement functions onto a single unified platform. The company custom tailors its software to meet the needs of each specific industry with AI and machine learning capabilities into their core applications.

SAP is a leader in the computer and technology sector, competing against multinational enterprise software giants like International Business Machines Co. NYSE: IBM, Microsoft Co. NASDAQ: MSFT, Salesforce Inc. NYSE: CRM and Oracle Co. NYSE: ORCL. Some of their major corporate clients include The Clorox Company NYSE: CLX, eBay Inc. NASDAQ: EBAY, NVIDIA CO NASDAQ: NVDA and Mondelez International Inc. NASDAQ: MDLZ.

30% of Deals in Q3 Involved AI Use Cases

SAP Today

SAP SE stock logo
SAPSAP 90-day performance
SAP
$292.03 -3.43 (-1.16%)
As of 08/8/2025 03:59 PM Eastern
52-Week Range
$205.51
$313.28
Dividend Yield
0.63%
P/E Ratio
48.35
Price Target
$281.67

The updraft was certainly evident in its third quarter 2024 adjusted EPS growth of 6% YoY to $1.33, which beat analyst estimates by 2 cents on 9.4% YoY revenues growth to $9.17 billion, which also beat consensus estimates of $9.15 billion. The current cloud backlog rose 25% YoY to $15.38 billion. Cloud ERP Suite revenue rose 34% YoY to $3.67 billion. Cloud revenue rose 25% YoY to $4.35 billion.

The company has had ongoing cloud transformation transitioning clients for the past four years, and it's hitting its stride driven by AI. Buoyed by Gen AI Hub, nearly 30% of its cloud order entries in the quarter were deals that had AI use cases. SAP hit its goal of 100 AI use cases across its suite. AI consumption by SAP customers more than quadrupled in the quarter. SAP completed its $1.5 billion acquisition of digital adoption platform WalkMe.

Sustained Momentum Moving Ahead

SAP expects the momentum to remain steady moving forward. They bumped up their cloud and software revenue forecast by $433 million at the midpoint to $31.93 billion to $32.24 billion. Cloud revenue is expected to be between $18.41 billion to $18.73 billion, maintaining its previous forecast.

While SAP doesn't anticipate margin risks in 2025, it is speculative how AI activity may impact gross margins beyond 2025. However, the company believes AI will be margin accretive. The company has been very consistent in 2024 as the AI trend has been unwavering, which points to a strong Q4 2024.

SAP Forms an Ascending Triangle Pattern

An ascending triangle is comprised of a flat-top upper trendline resistance converging with an ascending (rising) lower trendline support. The breakout occurs when the stock surges through the upper trendline. If the stock collapses under the lower ascending trendline, then the pattern fails as a breakdown forms.

SAP stock chart

SAP formed the upper flat-top trendline resistance at $242.10 converging with the lower ascending trendline support which commenced around the $219.55 swing low. SAP tested the upper trendline resistance nearly eight times without managing to break out, and the ascending trendline was tested twice. The daily anchored VWAP support is at $236.35. The daily RSI is rising at the 62-band. Fibonacci (Fib) pullback support levels are at $237.30, $231.10, $224.60, and $214.65.

SAP's average consensus price target is $252.35, implying a 0.96% upside and its highest analyst price target sits at $300.00. It has eight analysts' Buy ratings and one Hold rating. The stock has a miniscule 0.11% short interest.

Actionable Options Strategies: Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered call at upside Fib levels executes a wheel strategy for income on top of its 0.69% dividend yield.

Should You Invest $1,000 in SAP Right Now?

Before you consider SAP, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and SAP wasn't on the list.

While SAP currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Analysts Agree—These Gold Picks Outshine the Rest Cover

Unlock the timeless value of gold with our exclusive 2025 Gold Forecasting Report. Explore why gold remains the ultimate investment for safeguarding wealth against inflation, economic shifts, and global uncertainties. Whether you're planning for future generations or seeking a reliable asset in turbulent times, this report is your essential guide to making informed decisions.

Get This Free Report
Jea Yu
About The Author

Jea Yu

Contributing Author

Trading Strategies

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRankâ„¢Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
SAP (SAP)
3.0186 of 5 stars
$292.03-1.2%0.63%48.35Buy$281.67
eBay (EBAY)
4.4791 of 5 stars
$93.140.1%1.25%20.52Hold$78.19
International Business Machines (IBM)
4.8353 of 5 stars
$241.88-3.3%2.78%39.27Moderate Buy$268.75
Microsoft (MSFT)
4.9433 of 5 stars
$522.040.2%0.64%38.27Moderate Buy$609.86
Mondelez International (MDLZ)
4.83 of 5 stars
$61.83-0.9%3.04%22.65Moderate Buy$71.95
NVIDIA (NVDA)
4.6616 of 5 stars
$182.671.1%0.02%58.93Moderate Buy$183.75
Oracle (ORCL)
4.4032 of 5 stars
$250.040.3%0.80%57.61Moderate Buy$222.75
SAP (SAP)N/A€250.10-1.8%0.88%93.57N/AN/A
Clorox (CLX)
4.5244 of 5 stars
$124.89-0.9%3.97%19.16Reduce$143.36
Compare These Stocks  Add These Stocks to My Watchlist 

Featured Articles and Offers

Related Videos

ALERT: Big Tech Earnings – Watch Before Wednesday
ACT FAST! Congress is Dumping these 3 Stocks
NVDA Greenlight: China Sales Spark 50% Rally Potential

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines