Europe’s big enterprise AI hope SAP books 85% of 2026 revenue as deals boom
The world of enterprise AI is dominated by U.S. names from Microsoft to Salesforce, but Europe has a major player that is pushing hard into the space: SAP.
In an exclusive interview with CNBC’s “Europe Early Edition,” SAP CEO Christian Klein said that AI is “the number one reason” why customers are signing deals with the firm.
“After we close Q4, actually, 80, 85% of our revenue for next year is already done. So, [a] good pipeline for Q4 and with that, when we close out the year, our customers, also our investors, can expect there’s also very positive output,” he said.
SAP’s cloud backlog rose 23% in the third quarter to 18.8 billion, the company said in an earnings statement published late on Wednesday.
“I was pretty optimistic last night, and I’m still optimistic as the pipeline looks good,” Klein said. “We actually now have our biggest quarter.”
Revenue rose 7% to 9.08 billion euros ($10.53 billion), slightly below expectations of 9.15 billion euros, according to consensus figures compiled by LSEG. However, it saw gains of 22% in its cloud revenue, with Klein citing increasing AI and data cloud market share as the reason for the revenue jump.
Deutsche Bank said the firm remains a “top pick” in the European tech and global software sector, however it noted that SAP is now guiding toward the lower-end of its forecast for cloud revenue of 21.6 billion euros to 21.9 billions euros this year.
“Against an environment of lengthening deal cycles and pushouts … SAP continues to execute very well, in our view, even if delays in deal closings have led the company to guide to the lower end of its Cloud revenue growth range for FY25,” Deutsche Bank analysts said in a note led by Johannes Schaller.
SAP’s shares were initially 2% higher at the start of the trading session on Thursday, but later pared gains to trade 2.5% lower. The stock is down 3% year-to-date.
Europe’s AI playbook
SAP briefly became Europe’s most valuable company in March, riding the tailwinds of enthusiasm and gains in the German stock market.
The European Union has faced criticism for its legislative approach to AI, with some businesses calling for deregulation in efforts to catch up in the global AI race. Klein said he’s not sure if the bloc is adopting the right strategy compared with the U.S. approach of, “give me your AI, let’s test it, let’s refine it, let’s optimize it over time.”
The chief executive said he is laser-focused on creating value, explaining that it is “100%” what customers are looking for. It echoes the message of other AI firms and investors in Europe, given that the U.S. and China currently dominate the training of large language models, which is the infrastructure needed for AI. However, the general sentiment is that Europe has a chance to be a leader in putting it to use.
The training large language models is now a “commodity,” Klein said, adding that he expects the application of AI will become an increasing priority for businesses and SAP’s bet on this will be reflected in its share price in the future.
“It’s super important that we are not only selling into a hype, but that we see real adoption,” Klein said.
SAP has some exposure to China through partnerships that allow it to work “in China, for China,” due to geopolitical tensions, Klein noted. The country’s speed of AI development, low regulation and talent pool makes it hard to ignore, he said.
The company offers cloud solutions, expenses, and supply chain management and analytics to corporates. It underwent a large restructure in 2024 and pivoted towards AI services, which is now being used across the likes of finance and supplier sourcing.
Intel snapped a losing streak of six straight quarterly losses and returned to profitability in the third quarter.
In its first earnings report since the Trump administration acquired a 10% stake in the company, the U.S. chipmaker posted strong revenue, noting robust demand for chips that it expects to continue into 2026.
Client computing revenue, which includes chips for PCs and laptops, grew 5% year over year, benefiting from PC market stabilization and artificial intelligence PC prospects.
CEO Lip-Bu Tan said in a call with analysts Thursday that artificial intelligence “is a strong foundation for sustainable long-term growth as we execute.”
The chip strength and demand were bright spots, but there were areas of concern as well, with the company’s foundry business still needing a big break.
Here are three takeaways from the chipmaker’s Q3 report:
Cash flow
“We significantly improved our cash position and liquidity in Q3, a key focus for me since becoming CEO in March,” Tan said on a call with analysts Thursday.
Intel landed an $8.9 billion investment from the U.S. government in August, along with $2 billion from Softbank, but has not yet received the $5 billion tied to a deal with Nvidia. The company expects that deal to close by the end of Q4.
With all of those transactions completed, plus the Altera sale, Intel will have $35 billion in cash on hand, CFO David Zinser told CNBC.
The U.S. government is the company’s biggest shareholder, and Intel stock is up more than 50% since Aug. 22, when Commerce Secretary Howard Lutnick announced the deal.
“Like any shareholder, we have to keep in touch with them,” Zinser said of the U.S. stake. “We don’t tell them how the numbers are going before the quarter. We generally talk to them like Fidelity,” another Intel shareholder.
Intel 3-month stock chart.
Foundry
The firm’s foundry remains a work in progress.
Revenue fell 2% over the year before, and it has yet to land a major customer.
Intel now has two fabs running 18A nodes, which are designed for AI and high-performance computing applications.
“We are making steady progress on Intel 18A,” Tan said of its latest chip technology. “We are on track to bring Panther Lake to market this year.”
Zinser said the more advanced 14A nodes won’t be put in supply until the company has “real firm demand.”
Old stuff still selling
Zinser said the company’s older chipmaking processes, or nodes, have continued to do well, “and that was probably the part that was more unexpected.”
Zinser said the chipmaker met some of the central processing unit (CPU) demand with inventory on hand, but they will be behind in Q1, “probably Q2 and maybe in Q3.”
The supply crunch has been with older Intel 10 and 7 manufacturing technologies.
Many customers are opting for less advanced hardware to refresh their operating systems, demonstrating enterprises aren’t waiting for cutting-edge chips when proven technology gets the job done.
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