SAP CEO: Our AI breakthrough moment is coming

SAP SE (NYSE:SAP) faced a selloff in February due to AI concerns but has since shown signs of recovery. The company introduced AI capabilities at recent events, leveraging its enterprise data and workflows. Q2 cloud revenue rose 22%, with AI embedded in over 90% of large deals. SAP forecasts 2026 cloud revenue of €25.8B-€26.2B but warns of margin pressure from AI investments. Hedge funds are increasing holdings while short interest decreases.

European Cloud Competition Observatory (ECCO) criticized Broadcom's licensing practices, citing market-harming actions and obstruction of EU antitrust investigations. SAP was also flagged for potential anticompetitive practices, while Microsoft was praised for progress. Broadcom's VMware actions and SAP's API restrictions could impact competition and pricing in Europe.

SAP has released a patch for a critical vulnerability (CVE-2026-44756) in its kernel, affecting nearly all enterprise SAP software products. The bug, rated CVSS 10, allows remote code execution and is exploitable from multiple layers. Onapsis urges immediate patching, citing over 10,000 publicly exposed instances. SAP customers must apply the patch to avoid potential exploitation.

The Defense Logistics Agency plans to spend up to $903M over seven years to migrate its ERP system to SAP's government cloud, driven by a 2027 audit deadline. The contract includes cloud hosting, licenses, and managed services. DLA has already moved some functions to the new baseline and expects to complete the transition by 2028. This follows a similar $1B contract with the US Army in 2025.

Raymond James upgraded AMD to Strong Buy, forecasting server CPU market growth to $201B by 2030. UBS downgraded SAP to Neutral, citing slow AI delivery and cloud backlog risks. BofA reiterated ASML at Buy, arguing its valuation discount is unjustified. JPMorgan and BofA downgraded Intuit to Neutral due to weak guidance. Northland upgraded Semtech, seeing connectivity as an AI bottleneck.

Nvidia's positive outlook boosted tech stocks globally. European markets saw mixed results, with tech gains offset by declines in French shares and airlines. In the UK, Halfords and Computacenter rose, while Lloyds and banks fell. Nvidia's revenue growth forecast of 70% for next fiscal year drove its stock up 7.8%. Salesforce and CrowdStrike also surged after raising revenue forecasts.