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SAP SE (SAP) Performed Strongly in Q1

Harding Loevner, an asset management company, released its “Global Equity Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund generated a 6.9% gross of fee return in the first quarter compared to an 8.3% gain for the MSCI All Country World. Despite rising bond yields, the stock market gained throughout the quarter, partly because of continued interest in the potential applications of artificial intelligence. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Harding Loevner Global Equity Strategy highlighted stocks like SAP SE (NYSE:SAP), in the first quarter 2024 investor letter. SAP SE (NYSE:SAP) is a global provider of applications, technology, and services. The one-month return of SAP SE (NYSE:SAP) was -0.22%, and its shares gained 36.38% of their value over the last 52 weeks. On May 30, 2024, SAP SE (NYSE:SAP) stock closed at $180.25 per share with a market capitalization of $212.538 billion.

Harding Loevner Global Equity Strategy stated the following regarding SAP SE (NYSE:SAP) in its first quarter 2024 investor letter:

“In Germany, investors were positively surprised by SAP SE’s (NYSE:SAP) strong progress in migrating customers to new, cloud-based software solutions and management’s projection that growth will accelerate next year as a result.

SAP shares have recently outperformed as some long-term initiatives bear fruit. SAP has been on a multi-year journey to transform its renowned but somewhat monolithic Enterprise Resource Planning (‘ERP’) software—the digital brain of a large enterprise’s daily operations—into a more modern and modular cloud-based architecture, called SAP S/4HANA. This transition, which started long before generative AI rose to prominence, was intended to make it easier to analyze the vast data captured by ERP, but it has also situated the platform well for the AI era. In the most recent quarter, revenue from SAP’s cloud business, which grew 20% year over year, surpassed revenue from its shrinking legacy business of software licenses. The company expects this growth to be sustained in 2024 and 2025.

This quarter, SAP announced another initiative—to invest almost 1 billion euros in AI over the next two years and an additional 2 billion euros to restructure its workforce. Because of these programs, the company is projecting free cash flow will reach 8 billion euros in 2025, up from an earlier forecast of 7.5 billion euros. ERP was long considered an immutable piece of tech due to the critical and complex nature of the software; some have compared making changes to ERP systems to performing open-heart surgery. But SAP’s efforts to modernize ERP and revitalize its business seem to be working, and that work is becoming more appreciated by the market.”

A data centre room with cloud technology, illustrating the enterprise application software services.

SAP SE (NYSE:SAP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held SAP SE (NYSE:SAP) at the end of the first quarter which was 22 in the previous quarter.

SAP SE (NYSE:SAP) is off to a great start in Q1 and has established a strong base for growth. SAP SE (NYSE:SAP) reported first-quarter revenue of nearly $8 billion, up 9% year-over-year, showing continued growth momentum.

In another article, we discussed SAP SE (NYSE:SAP) and shared Jim Cramer’s latest stock picks in May 2024. Polen Global Growth Strategy commented about SAP SE (NYSE:SAP) in its first quarter 2024 investor letter. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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