SAP's Cloud Beat Wins Higher Targets — but JPMorgan Won't Budge and Customers Want to Know Where the AI Comes From

SAP's third-quarter report has produced a split verdict on the analyst floor, and a fresh line of questioning from clients about the provenance of its artificial intelligence. The stock rose 3.4% yesterday following Wednesday's release, yet the research notes that followed tell a less uniform story than the share price might suggest.

Jefferies lifted its price target to €250 from €220 and reiterated its "Buy" rating. Deutsche Bank Research moved from €200 to €235, also keeping a buy recommendation, with analyst Johannes Schaller pointing to the beat on expectations and the growing commercial weight of the "Autonomous Enterprise" offering. Other houses raised their targets too while holding on to their positive calls.

JPMorgan, by contrast, left both its rating and its target untouched: "Neutral," €175. That sits below the pre-market share price of €214.10. Analyst Toby Ogg did acknowledge the cloud backlog had come in ahead of consensus — his caution simply shows that strong operating numbers do not automatically translate into a buy recommendation.

The numbers behind the split

Revenue for the third quarter of 2026 climbed 13% to €10.3 billion. Cloud revenue outpaced the group, rising 26% to €6.67 billion, while the non-IFRS operating profit grew 18% — faster than sales, so the positive reaction was not pinned to a single growth metric.

The current cloud backlog, a forward-looking gauge rather than booked revenue, reached €24.1 billion, up 28% year on year, or 26% at constant currency. Reuters reported that SAP beat expectations on this measure, and that beat — not growth alone — helps explain the market's response.

Against all that momentum, the operating profit outlook for 2026 was left unchanged at €11.8 billion to €12.2 billion. Investors should not read the higher targets as a sign that SAP itself has raised its earnings guidance. The next test comes on 28 January 2027, when the company reports fourth-quarter and full-year 2026 figures.

Asam's inbox fills with AI questions

Separately, finance chief Dominik Asam told Reuters yesterday that customers are increasingly asking where the AI models embedded in SAP's enterprise software originate and which governance rules apply to them. SAP integrates more than 70 models from a range of providers, according to his remarks.

Those comments describe customer enquiries, not a reported drag on the business. No order slowdown and no change to guidance can be inferred from them. What they add to the growth debate is a concrete demand on the product side: the AI integration has to be explainable to clients, not merely technically capable.

Taken together, the quarter offers two poles. Cloud growth and a backlog ahead of consensus have given the stock tailwind and prompted several brokers to lift their sights. An unchanged profit forecast and JPMorgan's standing neutrality mark the limit of that enthusiasm — while Asam's disclosures put a third item on the agenda: how convincingly SAP can account for the AI it sells.