SAP Expands Sovereign Cloud to Power Europe's Digital & AI Innovation

SAP SE (SAP) recently unveiled its cloud strategy, expanding the SAP Sovereign Cloud portfolio, which highlights its commitment to digital sovereignty and AI-driven innovation in Europe. With heightened regulatory requirements, increasing data protection needs and a rapidly evolving AI landscape, SAP’s enhanced offerings aim to empower European enterprises, governments and regulated industries to innovate securely while maintaining full sovereignty over their digital assets.The expanded SAP Sovereign Cloud unlocks the full spectrum of SAP cloud innovations and AI tools, making them available within sovereign frameworks tailored to each customer’s requirements. A key feature of the updated SAP Sovereign Cloud is flexibility in deployment. Customers now have multiple options to meet their regulatory and operational needs.SAP Cloud Infrastructure (Europe) is its Infrastructure-as-a-Service (IaaS) platform, built with open-source technologies and operated within SAP’s European data centers. All data remains in the EU to meet the nation’s compliance requirements. SAP Sovereign Cloud On-Site offers SAP-operated infrastructure deployed within a customer’s chosen data center, delivering the highest levels of data, operational, technical and legal sovereignty while still enabling full SAP cloud innovation.Additionally, it offers Delos Cloud (Germany), a dedicated sovereign cloud for the German public sector, designed to accelerate digital transformation while meeting stringent national sovereignty requirements. This flexibility enables organizations to innovate at their own pace, with deployment models that balance compliance, control and scalability.SAP’s €20 Billion Commitment to Europe’s Digital FutureSAP is backing its sovereign cloud strategy with a €20 billion long-term investment in Europe’s digital resilience. This investment reflects the company’s focus on building secure, local and regulation-compliant cloud solutions for the public sector and highly regulated industries.With SAP Sovereign Cloud, organizations can run their SAP Business Suite in sovereign environments, while benefiting from continuous innovation cycles across SAP Business Technology Platform (SAP BTP) and embedded SAP Business AI capabilities. This ensures customers can accelerate transformation without sacrificing sovereignty or compliance.Already available in multiple countries, the offering is supported by hundreds of localized delivery experts and extensive certifications. This ensures organizations across industries can adopt sovereign cloud solutions knowing they meet the highest regulatory standards.Cloud-First Strategy Powers SAP’s Top-Line MomentumSAP’s cloud momentum continues to fuel growth. Cloud backlog rose 22% (28% at cc) to €18.1 billion in the second quarter, while cloud revenues jumped 24% (28% at cc) to €5.13 billion, led by a 30% surge in Cloud ERP Suite revenues to €4.42 billion. Strong adoption of RISE with SAP and GROW with SAP—with customers like Alibaba Group, BALMAIN and Cementos Argos—highlights growing demand for end-to-end business transformation. Despite macro headwinds, SAP reaffirmed its 2025 outlook, projecting cloud revenues of €21.6–€21.9 billion (up 26–28% at cc) and cloud & software revenues of €33.1–€33.6 billion (up 11–13% at cc).Furthermore, SAP’s growth strategy centers on four pillars — product innovation, go-to-market transformation, simplification and people. By infusing AI into its Business Suite, streamlining operations and investing in talent, SAP aims for sustained growth through 2027, with momentum building in the second half of 2025.The SAP Business Data Cloud is emerging as a core platform, unifying enterprise data to power AI-driven operations with trusted, context-rich insights. Business AI adoption is also accelerating. SAP launched 14 AI agents in first-half 2025, including one for Commerce Cloud that enhances natural language search. Other agents support quoting, customer service, dispute resolution and finance. By year-end, SAP plans to expand this portfolio to 40 AI agents across all business areas, driving automation in planning, accruals and cash flow.However, SAP faces revenue fluctuation challenges due to long sales cycles, complex license deals, shifting customer budgets and the close link between software and service revenues. U.S.-China trade tensions and tariffs continue to weigh on license sales. Cloud backlog growth slowed by one point in the second quarter, reflecting weaker bookings. Recovery timing is uncertain, but catching up in the second half, when roughly two-thirds of annual cloud deals are usually signed, will be critical.SAP’s Zacks Rank & Stock Price PerformanceSAP currently carries a Zacks Rank #3 (Hold). Shares of the company have soared 23.6% in the past year compared with the industry's growth of 21.2%.Image Source: Zacks Investment ResearchStocks to ConsiderUbiquiti Inc. (UI) carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.In the last reported quarter, it delivered an earnings surprise of 61.29%. Ubiquiti spends significantly on research and development activities for developing innovative products and state-of-the-art technology to expand its addressable market and remain at the cutting edge of networking technology. The company believes its new product pipeline will help to increase average selling prices for high-performance, best-value products, thus raising the top line. Ubiquiti is witnessing healthy traction in the Enterprise Technology segment.Jabil, Inc. (JBL) currently carries a Zacks Rank #2. In the last reported quarter, it delivered an earnings surprise of 9.44%.Jabil’s focus on end-market and product diversification is a key catalyst. The company’s target of “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable. This initiative should position Jabil well on the growth trajectory.InterDigital, Inc. (IDCC) currently carries a Zacks Rank #2. The company delivered an earnings surprise of 54.27% in the trailing four quarters.InterDigital’s global footprint, diversified product portfolio and the ability to penetrate different markets are impressive. It is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets. Apart from its strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive considerable value, considering the massive size of the market it licenses.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SAP SE (SAP): Free Stock Analysis Report Jabil, Inc. (JBL): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report Ubiquiti Inc. (UI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks