SAP upgraded to Buy as cloud growth and efficiency boost value despite share dips

SAP SE has been upgraded to a Buy rating due to accelerating cloud revenue and improved operational efficiency, even though its share price has recently declined. The company’s core ERP systems remain essential for large enterprises, countering fears of disruption from AI and SaaS competitors. SAP is also showing rising operating margins through disciplined workforce management and internal AI use, outperforming peers under margin pressure. Additionally, a €10 billion buyback program and a forward P/E ratio around 20 support potential stock re-rating in line with peers like Oracle and Microsoft.