Analyst Derrick Wood from TD Cowen maintained a Buy rating on SAP AG and keeping the price target at $300.00.
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Derrick Wood has given his Buy rating due to a combination of factors, including SAP’s strong positioning in Europe, resilient business model in the face of AI disruption, and a clear path to faster revenue and margin growth through 2027. He highlights multiple growth engines such as the shift from on‑premise to cloud, which significantly lifts recurring revenue, early monetization of AI capabilities like Joule and AI agents, and large contracts signed in late 2025 that should support future revenue.
Wood also believes the market underestimates how well SAP is shielded from AI-driven displacement given the complexity of its ERP and supply chain systems, its deep industry-specific expertise, and its partnership with Databricks on unstructured data, along with its volume-based pricing that limits seat-reduction risk. In his view, recent technical noise in contract metrics has masked improving large-deal execution, while upcoming catalysts—such as customer tariff relief, new AI product launches at Sapphire, and urgency around ECC end-of-life—combined with an attractive valuation discount to peers and his FCF-based price target, justify a Buy recommendation.