• SAP valued at €312 billion, changing Europe’s corporate hierarchy.
• Cloud transformation strategy and AI investments drive SAP’s market position.

German software house SAP overtook Novo Nordisk to claim the title of Europe’s most valuable listed company, to change the continent’s corporate hierarchy.

With a market capitalisation of €312 billion, the Walldorf-based enterprise and open-source software company has edged past the Danish pharmaceutical giant, signifying technology’s growing influence over Europe’s traditional sectors.

The milestone was passed early April 2025 and comes five months after SAP passed Dutch semiconductor equipment manufacturer ASML, in November 2024. It highlights the company’s strong growth and the increasing role of technology firms in European markets traditionally dominated by the pharmaceutical and industrial sectors.

The ascent comes after SAP’s pivot towards cloud-based subscription services and the integration of artificial intelligence capabilities in its product portfolio.

While Novo Nordisk’s shares have declined by approximately 16% in value this year, despite strong sales of its weight-loss drug Wegovy, SAP’s stock has been resilient, rising by over 40% this year. “The current developments in the stock market underscore the important role of technology companies in keeping Europe competitive on the global stage,” an SAP spokesperson told Euronews Business. “SAP’s continued investment in cloud, AI, and innovation reflects our commitment to driving digital transformation and long-term growth for businesses worldwide.”

Cloud and AI: key drivers of SAP’s valuation

SAP’s transition from traditional software licenses to subscription-based cloud services has stabilised revenue streams and favoured the company among investors seeking long-term growth opportunities. The company’s cloud revenue has consistently met market expectations in recent quarters, demonstrating the effectiveness of CEO Christian Klein’s “RISE with SAP” initiative.

“RISE with SAP” is designed to help enterprises migrate operations to the cloud, and has gained traction as businesses continue their digital transformation efforts. In parallel, SAP has invested in integrating artificial intelligence capabilities in its enterprise software suite. Its Business Technology Platform offers customers to analytics, machine learning, and process automation to improve operational efficiency.

Market analysts view the focus on cloud and AI as key to SAP’s growth. JPMorgan recently maintained an “Overweight” rating on SAP shares with a €300 price target, noting that “an attractive buying opportunity has emerged” for investors interested in the company’s potential.

Novo Nordisk’s market challenges

As SAP overtakes Novo in market capitalisation, the Danish pharmaceutical company faces challenges despite a 25% increase in revenue in 2024. The company is perhaps best known for its successful weight-loss drug Wegovy, but has seen its shares decline substantially in value from a peak last summer. Its Copenhagen-traded share price values the firm at approximately 2.3 trillion Danish krone (€309 billion), representing a nearly-50% decrease from last summer’s valuation, when shares traded around 1,000 Danish krone (€134).

Investor sentiment toward Novo Nordisk has been affected by disappointing study results for its next-generation weight loss drug, CagriSema. The drug failed to demonstrate superior effects compared to existing treatments. This setback, and increasing competition in the weight-loss drug market, have tempered the company’s growth outlook.

Opportunities and risks

For SAP to maintain its market position it has to address challenges related to customer migration to cloud platforms, which can be complex and costly. Analysts note that SAP’s valuation premium carries expectations of sustained growth that may prove challenging to maintain in the long term. The company faces competition from existing cloud-native providers and must continue to demonstrate that its transition strategies deliver bottom-line results for its clients.

Novo Nordisk’s historic strong revenue growth indicates underlying business strength, but market scepticism remains regarding its pipeline and ability to maintain market share in the face of emerging alternatives.