Deutsche Bank sees a buying opportunity in this large software stock

The recent pullback in one of Europe’s largest software companies has opened a buying opportunity, Deutsche Bank says, after the firm delivered stronger-than-expected third-quarter results and signaled improving deal momentum heading into year-end.

The bank reiterated its Buy rating on German software giant SAP (SAP), arguing that the company continues to execute well “against a temporarily slower demand environment.”

SAP reported third-quarter revenue of €9.1 billion, up 11% year-on-year in constant currency, with cloud revenue rising 27% to €5.3 billion.

Growth in its core cloud ERP suite remained strong at 31%, while the broader cloud backlog grew 27%, slightly above Deutsche Bank’s expectations.

The company raised guidance for operating profit and free cash flow (FCF), even as it guided cloud revenue to the lower end of its target range due to longer deal cycles earlier in the year.

FCF came in at €1.27 billion for the quarter, bringing the nine-month total to €7.2 billion and keeping SAP on track to meet its upgraded full-year guidance of €8–8.2 billion.

“Following the recent correction in the share price and with SAP’s pipeline into Q4 and FY26 looking full, we see a buying opportunity here in what remains a top pick for us in European Tech and global Software,” analysts led by Johannes Schaller said in a note.