SAP Target Raised to $375 on Cloud Strength

SAP (SAP, Financials) received a price target boost from JMP Securities, which raised its outlook to $375 from $330 after the German software maker posted strong second-quarter growth in cloud revenue, according to a note published Tuesday.

The company reported Q2 non-IFRS earnings per share of 1.50, ahead of the 1.45 consensus. Operating profit reached 2.57 billion, topping estimates of 2.42 billion. Revenue came in at 9.03 billion, just under the 9.08 billion forecast, but still rose 12% year over year in constant currency. Cloud revenue rose 28% to 5.13 billion, led by a 34% gain in Cloud ERP.

According to JMP, cloud momentum underpins long-term growth. Piper Sandler recently adjusted its target downward to 345, citing longer U.S. sales cycles in public sector and manufacturing. CEO Christian Klein downplayed the need for more AI-related data center builds, diverging from Nvidia's strategy.

Despite short-term backlog softness, SAP remains up 24% in 2025, outperforming the Russell 3000 and S&P 500, both up 7%. Investors await Q3 results, with attention on cloud margin expansion and backlog recovery.