20 AI News Investors Should Not Miss

15. SAP SE (NYSE:SAP)

Number of Hedge Fund Holders: 31

SAP SE (NYSE:SAP) is a German multinational software company offering enterprise application software and related services. It is the market leader in ERP software. SAP SE leverages AI to enhance its enterprise resource planning (ERP) solutions. Its Generative AI assistant, Joule, transforms the way users engage with SAP business systems. Moreover, AI Foundation on SAP BTP is SAP’s comprehensive AI toolkit that provides developers with ready-to-use, customizable AI solutions.

SAP SE (NYSE:SAP) has been promising its customers with lots of artificial intelligence tools and analytics. On Monday, October 21, SAP SE revealed that its cloud revenue rose 25% in the third quarter from a year ago. This was roughly in line with analyst estimates. The company’s cloud backlog, indicating sales expected to be recorded over the next twelve months, increased by 25% to reach €15.4 billion. The company is thriving now that its customers are shifting to cloud, where it’s offering them a whole lot of AI services for enterprise users. To compare, the company’s cloud business is promising a higher average spending per client than SAP’s legacy on-premise software.

“By the end of this year, we want to have 80% of the most frequent SAP use cases in AI so we can bring tremendous productivity to our customers…But in terms of monetization, we are still in the early innings.”

– Chief Financial Officer Dominik Asam said in an interview on Tuesday, October 22.

With SAP SE exceeding earnings estimates in its latest quarter, Wedbush Securities analyst Dan Ives highlights how SAP SE is going to be a “foundational player”.

“I think it’s going to be a huge step in the right direction on cloud checks, actually very strong for SAP”.

-Dan Ives

With the company’s transformation to cloud-based services continuing to accelerate, Ives notes cloud operations now represent approximately 45% of the company’s business. This figure is expected to rise to 70% by the end of next year, which indicates a substantial transformation in SAP’s business model.