SAP meets key CCB hurdle while improved commentary helps de-risk Q4 outlook Much of the focus into results was on Current Cloud Backlog growth, the key leading indicator for future growth, with the debate set squarely around 26.5% as the hurdle to clear in order to prevent downside to 2026 Cloud Revenue expectations. Q3 cleared that hurdle, delivering 27% growth ccy. Elsewhere, Q3 was generally slightly better than expected on Cloud Revenue growth, EBIT, EPS and FCF. Notably, SAP''s commentary around the demand environment improved from the more cautious tone at Q2, helping reassure investors on the outlook. Despite all this, the market reaction was muted, given the minimal likely revisions to expectations. SAP keeps us waiting for AI and Data Cloud ''nuggets'' to chew on With the AI disruption debate still hanging over the Software sector, we empathise with the muted market reaction to an otherwise solid print. In our view, SAP can help settle AI concerns by showcasing its compelling - and arguably unique - position combining its Application suite, Data module and Agentic AI solutions. We had hoped for additional disclosure here to whet the market appetite ahead of these opportunities materialising in financials, just as some peers have begun to do in recent weeks. We remain confident this will materialise in time, validating SAP''s strong position and ultimately signalling upward pressure to the mid-term growth trajectory. Until then, we expect to rely on near term earnings / FCF upside as the principal drivers of the share price. Valuation offers reasonable buying opportunity ahead of AI / Data cloud catalysts We update estimates, netting out to minor revisions. We keep our EUR300 TP unchanged / update ADR TP to $349 (from $351) for FX. We think SAP remains the most compelling equity story in European Software with a clear multi-year growth opportunity and earnings acceleration at play, together with a credible AI roadmap. Valuation has become more...