SAP Stock Remains a Top Pick Despite Price Target Cut

SAP SE (NYSE:SAP) is one of the AI Stocks Every Investor Should Watch. On September 22, BofA Securities analyst Frederic Boulan lowered the price target on the stock to EUR316.00 (from EUR320.00) while maintaining a Buy rating.

Despite shares underperforming the  SX8P by 5pp since Q2 earnings in July, the firm has reiterated SAP as a large cap top pick. The firm believes that SAP’s long-term growth is structural and durable.

SAP’s structural growth is seen driven by both software upgrade and infrastructure migration cycles. SAP is also considered an artificial intelligence beneficiary due to its critical data ownership holding monetization potential through its broad AI product set including SAP Joule and Analytics agents.

“We reiterate our Buy rating and large cap top pick on SAP. The stock is one of our “25 stocks for 2025″ and is on our Europe 1 list of top ideas. Shares have underperformed the SX8P by 5pp since Q2 earnings in July, and the message from back to school conferences remained cautious on short term bookings. However, we view SAP growth as structural, supported by both a software upgrade and infrastructure migration cycles, whilst we see SAP as an AI beneficiary, supported by critical data ownership, with monetization upside via by a broad AI product set across functions including SAP Joule and Analytics agents. At the same time, we expect AI to support operating leverage, with c0.5bn of AI efficiencies targeted and up to 30% efficiency gains in R&D. We continue to see a solid path to revenue acceleration in 2026 and beyond. We reduce forecasts for FX (c50bps impact on 2025 revenue, 100bps 2026), PO down to €316 from €320 (ADR to $371 from $376). Reit Buy with shares on 20x 2026E EBITDA for a highly predictable growth.”

SAP SE (NYSE:SAP) is a leader in ERP software that leverages artificial intelligence to enhance its enterprise resource planning (ERP) solutions.

While we acknowledge the potential of SAP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT:  10 AI Stocks on Market Radar and 10 AI Stocks in the Spotlight This Week

Disclosure: None.