Legacy software companies are seeing a surge in valuations, exemplified by SAP’s shares topping $200 for the first time. Founded in 1972, SAP’s valuation has hit an all-time high of $234 billion, growing more than 50% in the past year alone.
SAP’s rapid rise is attributed to its transition to a cloud-based model and injecting AI into its offerings. Reports suggest that their shift has been met with some resistance from on-premises customers, but SAP is doubling down on its cloud push.
Investment firm Ave Maria World Equity Fund highlighted SAP as one of its top performers in Q1 2024, noting the company’s transition to a SaaS model will open up new opportunities and enhance margins.
Old SAP
CEO Christian Klein’s focus on cloud transition and strategic partnerships with hyperscalers like Google and Nvidia has fueled SAP’s growth. The company’s shift from a legacy license model to cloud-based services has seen significant revenue growth.
