By Hakan Ersen

FRANKFURT (Reuters) -Shares in SAP were up 5% at market open on Tuesday, hitting an all-time high of 221 euros ($239.21) after the German software company raised its full-year targets on a strong cloud business in the third quarter.

Cloud revenue grew 27%, adjusted for currency effects, to 4.35 billion euros ($4.71 billion) in the third quarter, boosted by a 36% rise in sales of Cloud ERP Suite resource planning software.

Artificial intelligence was a key growth driver, according to CEO Christian Klein. "Around 30% of our cloud contracts in the third quarter included AI use scenarios," he said late on Monday.

With its guidance for 2025 unchanged, Barclays analysts wrote in a note that "even the new guide looks conservative".

They added that management "encouragingly" spoke on this conservatism.

Operating profit grew by 28% to 2.24 billion euros, exceeding expectations, helped by cost-cutting and a comparatively low number of new hires, CFO Dominik Asam said.

The company expects the cost of its restructuring to come at around 3 billion euros as it evaluates up to 10,000 jobs out of its 100,000 total headcount to prepare for the era of AI.

On this basis, the Walldorf-based group nudged up its full-year cloud and software revenue target to 29.5-29.8 billion euros from 29-29.5 billion euros.

It now sees 2024 operating profit at 7.8 billion euros, up from a forecast of 7.6-7.9 billion euros.

JPM analysts see SAP's performance as "a read-across to the health of Enterprise IT spending and specifically software within that," pointing to rivals Oracle , Workday and Microsoft .

($1 = 0.9239 euros)

(Reporting by Hakan Ersan, writing by Miranda Murray and Marleen Kaesebier; editing by Jason Neely and Louise Heavens)