SAP shares fall after peer Salesforce's guidance disappoints estimates

Investing.com -- Shares in German business software group SAP SE (ETR:SAPG) slipped in European trading on Thursday, weighed down by weaker-than-expected current-quarter guidance from U.S. peer Salesforce (NYSE: CRM).

By 06:49 ET (11:49 GMT), the stock had edged down by 2.5% to 171.40 euros.

For its fiscal second quarter, Salesforce projected that adjusted per-share earnings would be in a range of $1.31 to $1.33 on revenue of between $9.20 billion and $9.25 billion. Wall Street forecasts had seen the figures at $1.47 and $9.34 billion, respectively.

The outlook was impacted by weak spending on its enterprise-oriented products and services by inflation-squeezed clients, denting optimism around the California-based company's plan to use generative artificial intelligence to boost returns at its key Data Cloud unit. Chief Executive Marc Benioff struck a bullish tone on AI, however, saying the nascent technology continues to present a "massive opportunity for our customers to connect with their customers in a whole new way."

In April, SAP posted a jump in quarterly revenue at its own cloud segment and said it was focusing on investments in developing its own AI capabilities.

Analysts at Morgan Stanley said in a note to clients on Thursday that they believe SAP is "still in the early innings" of its push to enhance performace at its cloud offering.

You May Also Be Interested In

• Klarna shares tumble on weak full-year revenue guidance
• Nvidia or Sandisk? BofA reveals which stock is under-owned and which is crowded
• Cummins wins battery storage contract for U.S. data center project