SAP posted a strong quarterly profit rise and reported €9.88 billion in revenue, with cloud revenue up 22% and cloud backlog expanding to €22.9 billion, reinforcing momentum behind its Autonomous Enterprise strategy. The company cut its 2026 adjusted EBIT growth outlook to 13%–17% from 14%–18%, attributing some softness to higher AI-related marketing spend and recent acquisitions Dremio and Prior Labs, which are expected to lose money in the second half. Analysts meanwhile trimmed the stock’s 12-month price target to $243 while maintaining a Buy rating. Free cash flow rose 27% to €3 billion, underscoring robust profitability alongside softer software license sales. After-hours trading reflected positive sentiment as investors weighed the AI-driven growth narrative and the new outlook. Market observers noted the AI story remains a key driver for cloud and enterprise software, with valuation considerations tied to the updated guidance.