SAP vs IBM

This page compares SAP and IBM, offering a neutral view of business models, financial performance, and market context. It presents an accessible overview to help readers understand differences and similarities. Educational content, not financial advice.

This page compares SAP and IBM, offering a neutral view of business models, financial performance, and market context. It presents an accessible overview to help readers understand differences and sim...

Comparison Snapshot

Key Financial Metrics

SAP

Metric

IBM

$254.86B

Market Cap

$294.19B

67.18%

Potential Profit

-6.61%

Buy

Analyst Rating

Buy

Why It's Moving

SAP Stock Craters on Cloud Backlog Miss Despite Earnings Beat and Massive Buyback.

Q4 EPS surged 16% on 30% cloud bookings jump, highlighting robust AI demand, yet cloud backlog grew slower than expected, fueling doubts on momentum.
New €10 billion share repurchase through 2027 signals management confidence in cash flow, but conservative 2026 outlook for 23-25% cloud revenue growth fell short of lofty hopes.
Dismissal of three executives over stolen trade secrets adds governance clouds, amplifying the post-earnings plunge amid rising short interest.

Sentiment:

🐻Bearish

IBM Stock Surges on Stellar Q4 Earnings Beat and Robust 2026 Outlook Fueled by AI Momentum.

Software segment soared 14% with Automation up 18% and Data up 22%, underscoring explosive AI-driven demand.
Infrastructure revenue jumped 21% on strong adoption of next-gen mainframes, powering the earnings beat.
Pending $11B Confluent acquisition set to enhance real-time data streaming for AI, alongside analyst upgrades and steady $1.68 quarterly dividend.

Sentiment:

🐃Bullish

SAP Stock Craters on Cloud Backlog Miss Despite Earnings Beat and Massive Buyback.

Q4 EPS surged 16% on 30% cloud bookings jump, highlighting robust AI demand, yet cloud backlog grew slower than expected, fueling doubts on momentum.
New €10 billion share repurchase through 2027 signals management confidence in cash flow, but conservative 2026 outlook for 23-25% cloud revenue growth fell short of lofty hopes.
Dismissal of three executives over stolen trade secrets adds governance clouds, amplifying the post-earnings plunge amid rising short interest.

Sentiment:

🐻Bearish

IBM Stock Surges on Stellar Q4 Earnings Beat and Robust 2026 Outlook Fueled by AI Momentum.

Software segment soared 14% with Automation up 18% and Data up 22%, underscoring explosive AI-driven demand.
Infrastructure revenue jumped 21% on strong adoption of next-gen mainframes, powering the earnings beat.
Pending $11B Confluent acquisition set to enhance real-time data streaming for AI, alongside analyst upgrades and steady $1.68 quarterly dividend.

Sentiment:

🐃Bullish

Investment Analysis

SAP

Pros

SAP demonstrated a 27% year-over-year growth in cloud revenue, driven largely by a 31% increase in its cloud ERP suite.
The company reported a 12% increase in IFRS operating profit to €2.5 billion and a 19% rise in non-IFRS operating profit to €2.6 billion in Q3 2025.
SAP maintains strong fundamentals, including a healthy gross profit margin of 73.8% and a return on invested capital of 14%, with a moderate debt-to-equity ratio of 0.21.

Considerations

SAP's Q3 2025 revenue significantly missed expectations, reporting €9.08 billion against a forecast of €10.61 billion, causing a 1.51% stock decline post-release.
Despite revenue growth, the stock is considered overvalued with a relatively high P/E ratio around 35.9 to 45.17 and P/E/G of 4.06, suggesting limited growth upside versus price.
The stock shows volatility with a beta of approximately 0.90 to 1.28, and technical indicators suggest a bearish sentiment with projected near-term price declines.

IBM

Pros

IBM offers a diverse business model with software, consulting, infrastructure, and financing segments, supporting integrated digital and AI transformations globally.
The company is viewed as undervalued by approximately 67% based on discounted cash flow analysis, implying potential value relative to current market price.
IBM maintains strategic partnerships with major technology players including Amazon Web Services, Microsoft, Adobe, and SAP, strengthening its hybrid cloud and AI offerings.

Considerations

IBM’s price-to-earnings and enterprise value multiples are high (P/E around 49.1 and EV/EBIT 55.01), which may indicate a rich valuation despite the perceived undervaluation.
The company has a relatively high debt-to-equity ratio of 3.11, which suggests higher leverage and potential financial risk compared to peers.
Key financial metrics such as return on equity, assets, and invested capital are not readily available or reported, limiting visibility on operational efficiency.

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