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• SAP SE reported strong third quarter 2025 results, with cloud revenue rising 27% and total revenue reaching €9.08 billion, as management highlighted accelerating adoption of its Business Suite and AI-driven cloud offerings.

• Significant public sector wins, including a €1 billion contract with the U.S. Army and new AI-powered solutions, contributed to upgraded full-year guidance and reinforced SAP’s position as a leader in enterprise cloud transformation.

• We’ll examine how SAP’s robust Q3 cloud revenue growth and major contract wins could influence its investment narrative going forward.

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To be a shareholder in SAP, one needs to believe in its transition to a cloud-first enterprise software model and sustained growth in cloud and AI-driven services. The latest Q3 results, with 27% cloud revenue growth and a €1 billion U.S. Army contract, provide positive momentum for short-term catalysts like cloud bookings and reinforce the leadership narrative. However, the company’s confirmation that full-year cloud revenue will land at the lower end of guidance highlights persistent risks from elongated public sector sales cycles.

Among recent announcements, SAP’s completion of the SmartRecruiters acquisition supports cloud expansion efforts and addresses one of its biggest revenue and margin catalysts, broadening the portfolio and increasing the value of recurring cloud contracts. This acquisition not only enhances SAP’s HR cloud functionality but also adds further scale to its subscription-based offering, reinforcing cloud-led revenue catalysts in the wake of strong Q3 figures.

Yet, despite these growth signs, investors should be aware that pressure on sales cycles in sectors like the U.S. public sector could still…

Read the full narrative on SAP (it’s free!)

SAP’s outlook envisions €50.9 billion in revenue and €10.3 billion in earnings by 2028. This is based on analysts’ expectations of 12.3% annual revenue growth and a €3.8 billion increase in earnings from the current €6.5 billion.

Uncover how SAP’s forecasts yield a €287.60 fair value, a 23% upside to its current price.

Simply Wall St Community members provided 20 fair value estimates for SAP, ranging from €234.97 to €345 per share. While many see substantial upside, risks remain around the pace of cloud revenue growth and the impact of protracted enterprise purchasing cycles on future results, so you may want to consider other views before making a decision.

Explore 20 other fair value estimates on SAP – why the stock might be worth just €234.97!

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

• A great starting point for your SAP research is our analysis highlighting 4 key rewards that could impact your investment decision.

• Our free SAP research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate SAP’s overall financial health at a glance.

Early movers are already taking notice. See the stocks they’re targeting before they’ve flown the coop:

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include SAP.DE.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Ajinomoto (TSE:2802) shares have drawn fresh attention as investors revisit the company’s performance this month. While there has not been any single headline event, several market watchers are observing how its ongoing growth trends might influence future returns.

See our latest analysis for Ajinomoto.

Ajinomoto’s share price momentum has stayed positive, climbing nearly 33% year-to-date and maintaining a robust uptrend. With a striking 1-year total shareholder return of 51% and five-year returns above 330%, long-term investors have been rewarded as optimism builds around the company’s growth strategy.

If Ajinomoto’s steady climb has you thinking bigger, now is the perfect moment to explore fast growing stocks with high insider ownership.

But with shares hovering near their price targets after years of strong gains, investors may wonder if Ajinomoto is still trading below its true value or if the market has already factored in all the expected growth ahead.

Ajinomoto’s last close at ¥4,231 sits just below the narrative fair value estimate of ¥4,377. This marginal gap amplifies the debate over whether recent innovations and partnerships could unlock further upside, or if current expectations already reflect the company’s full earnings potential.

“Ongoing investment in R&D and human capital, particularly in Functional Materials and Bio-Pharma Services, is expected to yield differentiated, higher-value products (e.g., specialty amino acids, AI/PC/server-related materials), strengthening competitive moat and gradually improving net margins over the long term.”

Read the complete narrative.

Want to know exactly which breakthrough bets and financial projections are shaping this valuation? The “secret sauce” is a bold mix of future margin expansion, ambitious growth forecasts, and the expectation of a premium price tag usually reserved for market innovators. Find out what underpins this bullish vision if you are ready for a deep dive.

Result: Fair Value of ¥4,377 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent raw material cost inflation and weak demand in certain core markets could quickly derail Ajinomoto’s bullish recovery expectations.

Find out about the key risks to this Ajinomoto narrative.

While Ajinomoto looks slightly undervalued from a fair value perspective, its current price reflects a very high price-to-earnings ratio of 52.4 times. This is not just above the Japanese Food industry average of 16.4 times and its closest peers at 17.6 times, but also significantly exceeds the fair ratio of 33.8 times. This signals stretched expectations and higher valuation risk for investors. Is this optimism sustainable, or could it leave the stock vulnerable if growth falls short?

See what the numbers say about this price — find out in our valuation breakdown.

If you want to challenge the consensus or dig through the numbers yourself, you can build a personalized view in just a few minutes. Do it your way.

A great starting point for your Ajinomoto research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

Serious about building a standout portfolio? Skip the guesswork and let powerful data point you toward tomorrow’s winners. Don’t settle for ordinary opportunities.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include 2802.T.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com