Barclays Sees Opportunity in SAP SE (NYSE:SAP)'s Weakness

SAP SE (NYSE:SAP) is among the most profitable software stocks to invest in. In a September 30 report, Barclays identified attractive entry points in European technology stocks that have demonstrated weakness, highlighting SAP SE (NYSE:SAP) as a well-positioned name amid current fears regarding the comparative performance of AI-driven peers in the United States. The firm believes that the relative underperformance in the third quarter could serve as a momentum catalyst for many European tech companies.

The bank reiterates its ‘Overweight’ rating on SAP SE (NYSE:SAP), anticipating another robust quarter with core earnings outperforming estimates and sustaining resilience in its cloud backlog.

Separately, the macroenvironment remains favorable, as several German proposals have already been submitted to the EU for developing multi-billion-euro data centers. Federal Digital Minister Karsten Wildberger remains hopeful that Germany will receive at least one of what will possibly be five gigafactories.

Sebastian Steinhäuser, a board member at SAP SE (NYSE:SAP), recently expressed concerns regarding what he calls “misplaced priorities in the German debate over artificial intelligence (AI).” The company’s executive claims that programs are needed that target not only small businesses and workshops but also large enterprises, highlighting the use of AI in day-to-day operations. To intensify competition, he notes that a national initiative for AI training is mandatory.

SAP SE (NYSE:SAP) is a German provider of enterprise application and business solutions offering SAP S/4HANA, SAP SuccessFactors, and SAP customer experience solutions, among others. Incorporated in 1972, the company is a global leader in enterprise solutions and business AI, facilitating companies across various industries to operate seamlessly.

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