Shares of enterprise software giant SAP SE rose slightly in late trading today after the company fended off fears that its company could fall victim to the artificial intelligence boom by posting solid results in its latest earnings report.
Strong numbers released by SAP today suggest that AI tools that can automate certain types of business work and processes are not yet replacing the company’s software, which includes cloud services and operating systems for large enterprises.
The company reported second-quarter profit before certain costs such as stock compensation of 1.89 euros ($2.15) per share, handily beating Wall Street’s consensus estimate of 1.68 euros. Meanwhile, SAP’s revenue rose 11% to 9.88 billion euros compared to the same period last year, exceeding analysts’ target of 9.85 billion euros.
These figures helped SAP achieve an operating profit of 4.16 billion euros in the quarter, compared to a profit of just 3.54 billion euros a year ago. Investors liked what they saw, and SAP’s American depositary receipts rose more than 2% in after-hours trading.
SAP’s cloud division, by far its largest division, reported 24% year-over-year revenue growth. Meanwhile, its cloud order backlog rose 26% to 22.9 billion euros, the company said. The company has grown tremendously in recent years as more SAP customers move their data from on-premises database systems to SAP’s cloud platform, providing a recurring revenue stream. However, this shift came at the expense of the company’s software support revenue, which fell 7% in the quarter.
Like many software companies, SAP has been under pressure over the last year amid fears that AI tools will one day, perhaps soon, replace the need for traditional software tools. After all, why should you pay to use an expensive enterprise resource planning platform when you can simply have an AI coding bot build it for free? Luckily for SAP, this isn’t nearly as easy as it seems. However, the company’s stock is still down 40% year to date, largely due to these concerns.
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’s embedded AI solutions.
“Customers choose SAP to enable accurate and compliant AI outcomes based on their most critical business processes and data,” he emphasized. “We delivered another quarter of strong current cloud backlog growth, up 26% at constant exchange rates. This performance is underpinned by our Autonomous Enterprise strategy with strong momentum across our Autonomous Suite as well as our Business AI Platform.”
SAP did not raise its revenue forecast, but simply reiterated a previous forecast for full-year revenue and cash flow. However, after the acquisition of Dremio Inc. and Prior Labs GmbH in May, the company lowered its forecast for unadjusted operating profit by 100 million euros.
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Photo: SAP SE
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https://siliconangle.com/2026/07/23/sap-shrugs-off-ai-eating-software-fears-big-earnings-beat/
