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FRANKFURT (dpa-AFX) - Following a strong quarterly report, SAP shares continued their record rally on Wednesday. In early trading, the software company's shares shot up by more than 8 percent to a high of 161.54 euros. Most recently, they were the second strongest stock in the leading Dax index, up 6.3 percent at 158.80 euros. With growth of almost 14 percent in the still young stock market year 2024, SAP is one of the top stocks on the Dax.

In the final quarter, the Walldorf-based company once again benefited from the strong growth of its cloud offerings and earned more than expected in its day-to-day business. In 2024, earnings before interest and taxes are expected to grow by 17 to 21 percent adjusted for currency effects. SAP is targeting currency-adjusted revenue growth of 8 to 10 percent. The cloud division is again expected to be the driver with a targeted increase of 24 to 27 percent. The targets were better than expected by analysts.

Europe's largest software manufacturer also intends to invest heavily in the artificial intelligence (AI) segment. "We are planning to invest a total of almost one billion euros in this area this year and next," Chief Financial Officer Dominik Asam told the financial news agency dpa-AFX. The Group estimates that the associated job cuts and restructuring will cost 2 billion euros, with up to 8,000 jobs affected.

One trader described the Walldorf-based company's quarterly report as strong. One fly in the ointment was the turnover in the cloud business, which was slightly below expectations. However, this was compensated for by a strong outlook. "Above all, the focus on the trending topic of artificial intelligence is creating a positive mood among investors," wrote analyst Jochen Stanzl from broker CMC Markets.

All in all, the fourth quarter was "very solid" and the growth in the order backlog was remarkable, emphasized UBS analyst Michael Briest. However, he criticized the unexpectedly low sales in the subscription cloud business and the target for free cash flow in 2024. According to Andreas Wolf from Warburg Research, the software developer's targets for the current year are roughly in line with expectations. The results for the fourth quarter slightly exceeded expectations.

Jefferies analyst Charles Brennan spoke of a "complicated" set of figures in which the growth in the order backlog in the cloud business stood out positively. However, skeptics were able to point to the lower-than-expected margins. His colleague Knut Woller from Baader Bank believes that investors will now focus on the new calculation of operating profits and the announced restructuring program./edh/men/jha/