SAP Aims for AI Transformation Without Layoffs Amid Mixed Expert Opinions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Source: seekingalpha
- AI Transformation Strategy: SAP is encouraging employees to create new roles without layoffs, leveraging rapidly advancing technology to address challenges posed by AI, despite having cut around 10,000 jobs two years ago due to AI, indicating a cautious approach to transformation.
- Job Growth: Since 2023, SAP has added over 3,500 net new positions, including roles like forward-deployed engineers, reflecting the company's proactive stance in developing AI-driven solutions aimed at enhancing employee value and market competitiveness.
- European Economic Outlook: Some economists believe SAP's strategy could provide hope for Europe by helping to fill skill gaps, particularly against the backdrop of an aging population, as AI might alleviate labor shortages and stimulate economic growth.
- Need for Technological Investment: While SAP's AI strategy shows potential, analysts point out its reliance on U.S. AI models, emphasizing that Europe must invest quickly in digital infrastructure and skills training to avoid falling behind in the global AI race.
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Analyst Views on SAP
Wall Street analysts forecast SAP stock price to rise
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 160.490
Low
30.28
Averages
297.01
High
401.93
Current: 160.490
Low
30.28
Averages
297.01
High
401.93
About SAP
SAP SE (SAP) is a Germany-based application software company. The Company operates through two segments Applications, Technology & Support (ATS) segment and its Core Services segment. The ATS segment covers the Company’s integrated product portfolio and includes cloud subscription offerings, support services, and training solutions. It also encompasses activities related to operating cloud technologies and delivering customer support associated with its software products. The Core Services segment complements the Company’s product portfolio by delivering consulting and premium support services to assist customers in adopting its innovations. Revenue in this segment is primarily derived from professional services and enhanced support offerings, while costs arise from the execution of these service activities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Job Growth: Since 2023, SAP has added over 3,500 net new positions, including roles like forward-deployed engineers, reflecting the company's proactive stance in developing AI-driven solutions aimed at enhancing employee value and market competitiveness.
- European Economic Outlook: Some economists believe SAP's strategy could provide hope for Europe by helping to fill skill gaps, particularly against the backdrop of an aging population, as AI might alleviate labor shortages and stimulate economic growth.
- Need for Technological Investment: While SAP's AI strategy shows potential, analysts point out its reliance on U.S. AI models, emphasizing that Europe must invest quickly in digital infrastructure and skills training to avoid falling behind in the global AI race.
See More
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- Analyst Expectations: Despite challenges, 34 analysts set a median 12-month price target of $200 for Palantir, suggesting a potential 55% upside from current levels, with 21 analysts rating it as a buy, indicating a favorable outlook from the market.
- Earnings Growth: In Q1 2023, Palantir's earnings per share surged 154% year-over-year, with a 31% increase in customer count and total contract value reaching $2.41 billion, reflecting strong demand in the rapidly growing AI software market.
- Remaining Contract Value: By the end of Q1, Palantir's remaining deal value stood at an impressive $11.8 billion, nearly doubling from the previous year, which supports the company's ability to sustain triple-digit earnings growth rates in the coming year.
See More
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- Price Target Outlook: According to 34 analysts, Palantir has a median 12-month price target of $200, suggesting a potential 55% upside from current levels, while the highest target of $255 indicates the stock could nearly double, showcasing market optimism about its future.
- Earnings Growth Potential: Palantir's earnings per share are expected to jump by 97% to $1.48 in 2026, although the 42% growth projection for 2027 indicates a significant slowdown; nonetheless, the 154% year-over-year increase in Q1 highlights strong demand for its AI software solutions driving performance improvements.
- Customer Base Expansion: In Q1, Palantir's customer count rose by 31%, with total contract value reaching $2.41 billion, up 61% year-over-year, indicating robust performance in customer spending and market demand, which is expected to support future triple-digit earnings growth rates.
See More
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- Funding Initiative Launched: SAP has announced a one-time $1,000 contribution to the Trump Accounts of each eligible U.S. employee's child, designed to complement the federal seed contribution and support families in achieving long-term financial security.
- Account Background: Trump Accounts, also known as 530A Accounts, were established under the One Big Beautiful Bill Act as tax-advantaged investment accounts aimed at encouraging long-term savings and wealth creation for American children, with eligible children receiving a $1,000 federal seed contribution.
- Corporate Social Responsibility: CEO Christian Klein stated that this investment not only acknowledges America's tradition of innovation and opportunity but also aims to build a foundation of financial confidence and long-term opportunity for SAP America families, reflecting the company's commitment to social responsibility.
- Investment in Education and Skills: In addition to the funding initiative, SAP continues to invest in digital skills training, STEM and AI education, university partnerships, and workforce development, helping students and families prepare for the future of the digital economy and promoting sustainable societal development.
See More
Corporate Sponsorship Behind Trump's Freedom 250 Celebrations
- Corporate Sponsorship Phenomenon: A CNBC analysis reveals that 14 companies, including Boeing, Deloitte, and United Airlines, are backing both America250 and Freedom 250, indicating a complex intersection of corporate interests and politics that may influence their dealings with the government.
- Funding Transparency Issues: The sponsorship structure of Freedom 250 has been criticized for its opacity, allowing donors to gain access to Trump through contributions as high as $10 million, raising concerns about corporations seeking political influence.
- Celebration Participation Status: Despite Congress allocating $150 million for the 250th anniversary, America250 has only received $25 million, while Freedom 250 has secured nearly $80 million in funding, highlighting the financial advantage of Trump-aligned events.
- Event Organization Challenges: The Great American State Fair has faced poor participation, with at least eight states declining to join due to exhibit costs and partisan concerns, resulting in sparse crowds and equipment failures during the event.
See More
Corporate Sponsorship of Freedom 250 Raises Concerns
- Corporate Sponsorship: Major companies like Boeing, Lockheed Martin, and Oracle are sponsoring Freedom 250, and while no direct evidence links these sponsorships to government dealings, watchdogs warn this could create new avenues for corporate influence in Washington.
- Opaque Funding Structure: Freedom 250's fundraising materials indicate that donors contributing over $500,000 gain VIP access to Trump, raising ethical concerns about the transparency of funding and potential impacts on government decision-making.
- Celebration Participation: Despite Congress allocating $150 million for the 250th anniversary, Freedom 250 has secured nearly $80 million in related grants, while America250 has only received $25 million, indicating a preference among companies for Trump's version of the celebration.
- Event Issues: The Great American State Fair, a centerpiece of Freedom 250, has faced reduced state participation, sparse crowds, and technical failures, with some artists withdrawing due to concerns over the partisan nature of the event, highlighting organizational challenges.
See More
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- AI Transformation Strategy: SAP is encouraging employees to create new roles without layoffs, leveraging rapidly advancing technology to address challenges posed by AI, despite having cut around 10,000 jobs two years ago due to AI, indicating a cautious approach to transformation.
- Job Growth: Since 2023, SAP has added over 3,500 net new positions, including roles like forward-deployed engineers, reflecting the company's proactive stance in developing AI-driven solutions aimed at enhancing employee value and market competitiveness.
- European Economic Outlook: Some economists believe SAP's strategy could provide hope for Europe by helping to fill skill gaps, particularly against the backdrop of an aging population, as AI might alleviate labor shortages and stimulate economic growth.
- Need for Technological Investment: While SAP's AI strategy shows potential, analysts point out its reliance on U.S. AI models, emphasizing that Europe must invest quickly in digital infrastructure and skills training to avoid falling behind in the global AI race.
See More
