☁️ European SAP $SAP showed that its cloud transition continues to gain strength. In the second quarter, cloud revenue grew 24% (in constant currencies) to 6.28 billion euros, slightly beating analyst expectations. Even more important in my view is that the cloud backlog rose 26% to 22.9 billion euros, indicating demand for cloud solutions remains very strong.

On the other hand, management slightly lowered its operating profit outlook for this year. The reason is not a slowing business, but higher costs related to recent AI-focused acquisitions like Dremio and Prior Labs. Meanwhile, the cloud revenue outlook remained unchanged.

It’s interesting to watch how SAP is gradually transforming from a traditional software company into a cloud company with a strong AI focus. In the short term, higher investments may pressure profitability, but if the company maintains the current pace of cloud growth, it could benefit in the coming years.

Another bonus in my view is the tension between the EU and US tech giants, which has been intensifying lately. SAP could benefit from its European roots here.

Does anyone have SAP in their portfolio? Do you see it as an interesting European tech bet, or do you rather choose US giants?