Is SAP (SAP) Mispriced as AI Fears Overshadow Its Core ERP Strength?
Eagle Capital Management's Q2 2026 investor letter discusses how AI-driven enthusiasm has boosted S&P 500 earnings growth, yet also amplifies risks from high valuations and concentrated demand. The firm remains bullish on AI but prefers a diversified portfolio approach. Eagle Capital believes SAP's core enterprise software business could grow rapidly in the next five years as it modernizes customer platforms, though peripheral products may face increased competition.
Despite SAP's mission-critical status, the company is not among the 40 most popular stocks held by hedge funds, who see greater upside potential in other AI stocks with lower downside risk.
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