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(Bloomberg) -- SAP SE reported fourth-quarter cloud sales that slightly beat analysts’ expectations, as Europe’s biggest technology company won customers with new artificial intelligence capabilities. The company also named a suite of new executives and said it plans to simplify its strategy.
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Cloud revenue in constant currencies rose 27% from a year earlier to €4.71 billion ($4.9 billion), the Walldorf, Germany-based company said in a statement on Tuesday. That compares with an average estimate of €4.68 billion by analysts surveyed by Bloomberg.
SAP has promoted AI business services to incentivize clients to shift from legacy on-site servers to IT infrastructure on the cloud, where average spending per client is higher. Software companies are increasingly focusing on AI agents that can complete tasks without human supervision as demand for the emerging technology grows.
Shares rose as much as 3.1% to reach an intraday record. They were trading up 0.4% to €262.55 at 9:22 a.m. in Frankfurt.
A new cheap and efficient AI model from China’s DeepSeek that roiled public markets on Monday was welcomed by SAP Chief Executive Officer Christian Klein.
“This is first of all very good news for our AI strategy,” Klein said of the model in an interview on Bloomberg TV. “We said from day one on, we partner first on AI infrastructure and large language models. We believe this is becoming more and more a commodity.”
SAP raised its 2025 cloud revenue outlook to €21.6 billion to €21.9 billion, up from a previous forecast of more than €21.5 billion. SAP’s current cloud backlog, which reflects sales that will be booked over the next twelve months, grew 29% in constant currencies to €18.1 billion.
Half of SAP’s deals in the fourth quarter had AI embedded, according to Klein.
SAP’s strategy helped propel the software firm to become Europe’s most valuable technology company last year, leapfrogging Dutch chip machine maker ASML Holding NV. Shares have risen 61% in the last year to a near-record high.
The company also announced changes to its executive ranks and board after a number of departures last year that consolidate more control directly under Klein, who is increasingly promoting AI tools and services on top of its cloud products.