SAP Stock Surges 37% Year to Date: Will the Rally Continue?

SAP SE's (NYSE: SAP) stock is continuing its upward trajectory, with a gain of 36.7% in the year to date compared with 13.3% and 6.2% growth of the S&P 500 composite and the sub-industry, respectively.

The company is currently trading at a nearly 4.5% discount to its 52-week high of $221.24, reached on Aug. 29, 2024. This pullback from the recent peak might offer a strategic buying opportunity for investors looking to capitalize on potential gains.

With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) stock appears to be a solid investment option at the moment.

Image Source: Zacks Investment Research

Apart from a favorable rank, SAP has a VGM Score of B. Per Zacks' proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or 2 and Growth Score of A or B offer solid investment opportunities.

SAP's Thriving Cloud Business

SAP has been concentrating on expanding its cloud business to become one of the leading players in the category. In the last reported quarter, the current cloud backlog — a key indicator of go-to-market success in cloud business — soared 28% (both at nominal and cc basis) to €14.8 billion.

Increasing demand for Rise with SAP solution remains the biggest driver. This solution helps companies transform its business processes and operations to become more nimble, digital and intelligent. SAP solution continues to gain significant traction and will aid the company in driving its market share in the cloud ERP solutions space.

Rise with SAP will also help the company boost the uptake of its SAP S/4HANA ...