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How Investors Are Reacting To SAP (XTRA:SAP) Deepening AI Partnerships With Lemongrass and RESAAS

Simply Wall St · 1d ago
  • In recent days, Lemongrass and RESAAS each announced new partnerships with SAP under the PartnerEdge program, aiming to embed their AI and real-time data solutions more tightly into SAP’s Business Technology Platform and enterprise analytics stack.
  • These collaborations, together with SAP’s emphasis on an application–data–AI flywheel and employee-led innovation, underline how the company is working to keep its software central to mission-critical workflows as customers modernize in an AI era.
  • Now, we’ll explore how this push to embed partner-led AI solutions into SAP’s core platforms may influence the company’s investment narrative.

Outshine the giants: these 26 early-stage AI stocks could fund your retirement.

SAP Investment Narrative Recap

To own SAP, you need to believe it can keep its core ERP and data platforms central as AI reshapes enterprise software, while successfully lifting cloud and Business AI adoption. The Lemongrass and RESAAS partnerships modestly support that near term AI and data catalyst, but do not materially change the biggest current risk, which remains competitive pressure from more modular, open and best of breed cloud rivals.

The new RESAAS PartnerEdge integration is particularly relevant because it shows how third party, real time industry data can be pulled directly into SAP’s analytics and AI layers. For the AI and cloud story to matter for shareholders, partnerships like this need to make SAP harder to unplug from customers’ day to day decision making, reinforcing the longer term theme of higher value, stickier recurring revenue streams.

Yet behind the AI partnerships, investors should still watch how rising open source and modular competition could affect SAP’s long term pricing power and...

Read the full narrative on SAP (it's free!)

SAP's narrative projects €50.9 billion revenue and €10.3 billion earnings by 2028. This requires 12.3% yearly revenue growth and about a €3.8 billion earnings increase from €6.5 billion today.

Uncover how SAP's forecasts yield a €286.75 fair value, a 37% upside to its current price.

Exploring Other Perspectives

XTRA:SAP 1-Year Stock Price Chart
XTRA:SAP 1-Year Stock Price Chart

Twenty one members of the Simply Wall St Community see SAP’s fair value between €229.81 and €345, highlighting very different expectations. Against that spread, the key question is how quickly SAP can embed Business AI into customer workflows to support revenue and margin ambitions over time, which is where the recent AI focused partnerships could matter most.

Explore 21 other fair value estimates on SAP - why the stock might be worth just €229.81!

Build Your Own SAP Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your SAP research is our analysis highlighting 4 key rewards that could impact your investment decision.
  • Our free SAP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SAP's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.