What SAP (XTRA:SAP)'s Cloud and AI Acceleration Means For Shareholders

• Earlier in October 2025, SAP reported strong third-quarter earnings, completing a €4.9 billion share buyback program, while highlighting accelerated cloud and AI momentum across major client projects and collaborations with industry leaders like OpenAI and Amazon Web Services.
• This period also featured large-scale migrations to SAP’s cloud platform by global enterprises such as Nestlé and Wärtsilä, underlining SAP's expanding influence in enterprise digital transformation and AI-driven business solutions.
• We'll now explore how SAP's rapid cloud adoption and AI partnerships are shaping its investment narrative in the wake of these announcements.

AI is about to change healthcare. These 33 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

SAP Investment Narrative Recap

To be a shareholder in SAP today, you need to believe in its ability to drive sustained revenue and profit growth through rapid expansion of its cloud and AI solutions, while managing competitive and regulatory risks. The recent earnings update and completion of a €4.9 billion share buyback reinforce the short-term catalyst of robust cloud migration, but do not materially alter the ongoing risk of customer attrition due to increased competition from flexible, modular cloud offerings.

Among the latest company highlights, SAP’s announcement of accelerated large-scale migrations, like Nestlé’s upgrade to S/4HANA Cloud Private Edition, directly supports the narrative that the company’s next leg of growth will come from enterprises prioritizing digital transformation via cloud and AI solutions. These moves speak to the importance of cloud adoption as a driver of recurring revenue, but also raise questions about how efficiently SAP can scale these complex implementations amid evolving customer demands and competition.

Yet, investors should also be mindful that while SAP’s cloud transition is picking up pace, there remains the very real possibility that...

Read the full narrative on SAP (it's free!)

SAP's outlook anticipates €50.9 billion in revenue and €10.3 billion in earnings by 2028. This implies a 12.3% annual revenue growth rate and a €3.8 billion increase in earnings from the current €6.5 billion.

Uncover how SAP's forecasts yield a €288.14 fair value, a 28% upside to its current price.

Exploring Other Perspectives

Twenty members of the Simply Wall St Community estimate SAP’s fair value between €234.97 and €345, reflecting broad divergence in outlooks. As SAP accelerates its cloud migration efforts, these contrasting views highlight the range of potential outcomes and invite you to consider alternative perspectives on the company’s future trajectory.

Explore 20 other fair value estimates on SAP - why the stock might be worth as much as 54% more than the current price!

Build Your Own SAP Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your SAP research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free SAP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SAP's overall financial health at a glance.

No Opportunity In SAP?

Every day counts. These free picks are already gaining attention. See them before the crowd does:

• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.
• The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• We've found 22 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com