SAP Stock: AI Ambitions Tempered by Cash Flow Concerns

SAP's stock experienced a slight dip of 1.03% to €263.05 during Thursday's XETRA trading, even as analysts expressed optimism following the company's annual Sapphire customer conference in Orlando. The Walldorf-based software giant unveiled ambitious artificial intelligence initiatives, including partnerships with Perplexity and Palantir, while expanding the availability of its AI assistant Joule. Baader Bank maintained its "Add" rating with a €270 price target, with analyst impressions suggesting confident management outlook regarding both current-year growth and future prospects. Particular interest was noted in SAP's new Business Data Cloud solution, with a growing product pipeline signaling potential for sustained expansion.

Analyst Projections Mixed on Short-Term Performance

Despite the generally positive reception, some caution has emerged regarding immediate financial expectations. Jefferies, while maintaining a bullish €300 price target and highlighting SAP's continuous progress in AI integration, warned that market expectations for free cash flow might be overly ambitious in the near term. The company's strategic shift toward cloud-based subscription models under its 'Suite-as-a-Service' concept forms a central pillar of its growth strategy, alongside its AI offensive. Investors now face the question of whether SAP's path to higher valuation will be a sprint or a marathon with occasional pauses, as the company balances long-term technological innovation against short-term financial performance.

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Source StockWorld