SAP's Buy Case Holds Firm as Berenberg Keeps €205 Target and AI Rollout Accelerates

Berenberg reiterates Buy on SAP with a €205 target, citing 22% cloud revenue growth and a 27% jump in cloud backlog despite a 12% YTD share decline.

Berenberg has no intention of budging on SAP. Analyst Nay Soe Naing reaffirmed his "Buy" rating and left his twelve-month price target untouched at €205, arguing that sentiment across the software and IT sector is on the mend and that customers are barely scaling back spending on traditional software as they adapt to artificial intelligence. Robust results are what he expects over the coming quarters, along with encouraging signals looking out to 2027.

The market, for its part, is not yet pricing that in. SAP shares changed hands at €185.30 on Friday, slipping 0.5% on the day and sitting roughly 23% below the 52-week high of €242.00 reached last October. The picture brightens over a shorter horizon — the stock has added 4.0% across the past seven sessions — yet it remains down 12% since the start of the year.

Cloud Metrics Underpin the Bull Case

Hard operating numbers give the analysts something to lean on. Cloud revenue expanded 22% in the second quarter, with the cloud ERP segment growing even faster at 25%. The current cloud backlog, the contracted pipeline that signals future revenue, jumped 27% to €22.9 billion.

Free cash flow reached €6.25 billion in the first half, with roughly €10 billion penciled in for the full year. Non-IFRS operating profit is guided to land between €11.8 billion and €12.2 billion.

Those growth rates go a long way toward explaining Berenberg's refusal to waver despite choppy markets. While plenty of software vendors are feeling the pinch as corporate clients comb through their IT budgets, Naing's view is that SAP has largely escaped the belt-tightening — a signal that its core systems have become close to indispensable for customers.

Product Momentum Beyond the Core

The investment thesis gets support from the product side as well. SAP was named a "Strategic Leader" in the Fosway 9-Grid for Cloud HR 2026, with Fosway CEO David Wilson awarding SAP SuccessFactors an "Excelling Trajectory" for the current year.

Dutch logistics group PostNL offers a concrete illustration: using SAP SuccessFactors alongside the Joule AI solution, it cut payroll processing time from five days to four hours — a 90% reduction — and expects support costs to fall by 80%. Such references feed into a broader shift, as payroll operations grow more complex through cloud adoption, automation and flexible working models, even as companies demand higher data quality and tighter compliance. SAP is positioning itself as the vendor able to connect HR, IT, finance and compliance under one roof.

New AI Tool Arrives Without the Training Overhead

SAP's AI ambitions extend well past HR. This week the company made its TabPFN-3.5 Plus model technology available in SAP AI Core, promising enterprises instant predictions for business questions without the burden of extensive model training — a selling point that is becoming increasingly persuasive in enterprise software. The Walldorf-based group has been steadily stacking up real-world examples to back its AI platform, including the deployment of its Business Data Cloud at esports organization Team Liquid, which is using it to sharpen player performance. The aim is to demonstrate that SAP's AI tools reach far beyond classic accounting and logistics software.

Routine maintenance continues alongside the product news. SAP's monthly Security Patch Day brought fresh advisories covering platforms including NetWeaver, S/4HANA, the Integration Suite and the Commerce Cloud. Such patches are standard fare for a company of this scale, though they serve as a reminder of how deeply SAP systems are woven into critical business processes — and why security gaps remain a persistent risk factor.

A September Stage for the AI Pitch

On 22 September, SAP plans an online event titled "Powering the Autonomous Enterprise with AI Agents and Cloud ERP Private," focused on linking AI agents with cloud ERP systems. The theme was already pushed to the fore at the Goldman Sachs Communacopia + Technology Conference, where the company sketched out AI's role in the next phase of enterprise software. Investors are likely to treat the event as another test of how convincingly SAP can convert its AI promises into concrete customer projects.

On the chart, the stock has steadied. At €186.44, it trades about 9.4% above its 50-day moving average — evidence that the near-term recovery from the recent low still has legs. Over the past seven trading sessions the shares have gained 4.6%, though they remain down 11% year to date. The recent product announcements do little to change that, but they do show SAP pressing ahead with its AI agenda despite the weaker annual performance, with September shaping up to deliver further catalysts.

Valuation Still Seen as Undemanding

Even after the recent bounce, observers continue to view the stock as undervalued, including against other dividend names. Full-year EPS is forecast at €7.05, and the next quarterly figures are scheduled for 21 October. Until then, Berenberg's buy call and its €205 target are likely to remain the key reference point for investors betting on the shares' continued catch-up.