Warburg Research Raises PT on SAP (SAP), Maintains Buy

SAP SE (NYSE:SAP) is one of the 10 software stocks analysts are upgrading. On June 13, research firm Warburg Research upped the price objective on the company’s stock from €275 to €295, while maintaining a “Buy” rating. The firm’s analyst, Andreas Wolf, sees further cloud growth and margin improvements, which led to the increase in long-term estimates. Furthermore, the analyst opines that AI is expected to fuel growth further and make software development more efficient.

In Q1 2025, SAP SE (NYSE:SAP)’s current cloud backlog expanded 29% at constant currencies and the total revenue encountered a double-digit increase. With a share of more predictable revenue of 86%, the business model is resilient in uncertain times. Furthermore, SAP SE (NYSE:SAP)’s AI-powered portfolio allows companies to navigate supply chain disruptions in more than 130 countries. In Q1 2025, the company’s cloud and software revenue rose 14% to €7.94 billion, and was up 13% at constant currencies.

In January 2024, SAP SE (NYSE:SAP) announced a company-wide restructuring program, which was concluded in Q1 2025. The restructuring payouts came in at €2.5 billion for FY 2024 and €0.3 billion for Q1 2025. Furthermore, ~€0.4 billion is anticipated to be paid out in the balance of 2025.

SAP SE (NYSE:SAP) offers enterprise applications and business solutions.

While we acknowledge the potential of SAP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than SAP and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.