{"id":557058,"date":"2026-07-24T08:04:15","date_gmt":"2026-07-24T08:04:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/557058\/"},"modified":"2026-07-24T08:04:15","modified_gmt":"2026-07-24T08:04:15","slug":"sap-shrugs-off-fears-of-ai-eating-software-with-big-earnings-beat","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/557058\/","title":{"rendered":"SAP shrugs off fears of AI eating software with big earnings beat"},"content":{"rendered":"

Enterprise software giant SAP SE\u2019s<\/a> stock inched up in late trading today after it shook off concerns that its business might become a victim of the artificial intelligence boom by posting solid results in its latest earnings report.<\/p>\n

The strong numbers posted by SAP today suggest that AI tools that can automate some kinds of business work and processes aren\u2019t yet replacing its software, which spans cloud services and operating systems for large enterprises.<\/p>\n

The company reported<\/a> second-quarter earnings before certain costs such as stock compensation of \u20ac1.89 ($2.15) per share, surpassing Wall Street\u2019s consensus estimate of \u20ac1.68 by a wide margin. Meanwhile, SAP\u2019s revenue increased 11% from the same period one year ago, to \u20ac9.88 billion, beating the \u20ac9.85 billion analyst target.<\/p>\n

Those numbers helped SAP post an operating profit of \u20ac4.16 billion in the quarter, up from a profit of just \u20ac3.54 billion one year ago. Investors liked what they saw, and SAP\u2019s American depository receipts gained more than 2% in the after-hours trading session.<\/p>\n

SAP\u2019s cloud business unit, which is by far its largest segment, saw sales grow 24% from a year earlier. Meanwhile, its cloud backlog jumped 26% to \u20ac22.9 billion, the company said. The business has grown immensely in recent years as more of SAP\u2019s customers shift their data from on-premises database systems to SAP\u2019s cloud platform, which generates a recurring source of revenue. However, that shift has come at the expense of the company\u2019s software support revenue, which declined 7% in the quarter.<\/p>\n

Like many software companies, SAP has been under pressure<\/a> for the last year amid fears that AI tools will one day, perhaps even soon, replace the need for traditional software tools. After all, why pay to use an expensive enterprise resource planning platform when you can simply have an AI coding bot create one for you for free? Fortunately for SAP, doing that isn\u2019t nearly as simple as it seems. However, its stock has still declined 40% in the year to date, primarily on those concerns.<\/p>\n

But SAP is trying to change the narrative, and its management insists that it can actually become one of the leading AI providers. Chief Executive Christian Klein (pictured) argued that generic AI tools simply cannot match the capabilities and reliability of SAP\u2019s embedded AI solutions<\/a>.<\/p>\n

\u201cCustomers are choosing SAP to enable accurate and compliant AI outcomes grounded in their most critical business processes and data,\u201d he insisted.\u201cWe delivered another quarter of strong current cloud backlog growth, up 26% at constant currencies. This performance is underpinned by our Autonomous Enterprise strategy with strong momentum across our Autonomous Suite as well as our Business AI Platform.\u201d<\/p>\n

SAP did not bump up its revenue guidance, instead just reiterating an earlier forecast for its full-year revenue and cash flow. However, it did reduce its guidance for non-adjusted operating profit by \u20ac100 million, following its acquisitions of Dremio Inc. and Prior Labs GmbH<\/a> in May.<\/p>\n

Photo: SAP SE<\/p>\n

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