SAP shares go up by 6% following Q1 results, gets ready to adopt ChatGPT
SAP (NYSE:SAP) shares experienced a 6% increase on Friday following the release of its Q1 results, which were a mixture of both good and bad news for the European software maker. The company's CEO, Christian Klein, announced its intention to integrate ChatGPT into some of its products. SAP has been working with ChatGPT for a while and has created 50 use cases for artificial intelligence using its technology. Klein has stated that SAP has tested the AI for biases and any potential misuse, and the products will be available to customers next month.
OpenAI is the developer of ChatGPT and is partially backed by Microsoft (MSFT), which is a direct competitor of SAP. For Q1 2021, SAP earned €0.35 on €7.44B. Analysts had estimated earnings of €1.12 and €7.39B, respectively. However, the cloud revenue has shown a 24% YoY increase, or 22% in constant currency. SAP has reported that its cloud backlog is up 25% in nominal and constant currencies.
SAP has reaffirmed its outlook for continuing operations following the divestment of Qualtrics last month. The company expects the revenue to amount to €14B and €14.4B, up 23% YoY for cloud revenue, and between €26.9B and €27.4B for cloud and software revenue. SAP predicts free cash flow to be around €4.9B for this year.
In March, the software maker sold all of its 423M shares of Qualtrics to funds affiliated with Silver Lake and the Canada Pension Plan Investment Board.
