European stocks open higher; SAP shares rise after first-quarter profit jump

SAP’s 60% year-on-year profit jump in the first quarter of 2025 is a “masterclass in resilience,” Deutsche Bank analysts said in a note to clients on Wednesday.

Analysts at the German lender said they expect SAP to weather any downturn that may hit the global economy, touting “the strong cost discipline and further cost levers management holds in the event of a further macro deterioration that would allow it to protect profitability.”

“Overall, with warnings starting to materialise in the Technology sphere and in light of SAP shares being -22% from the peak, this is a strong set of results and illustrates the resilience and defensiveness of SAP’s earnings trajectory,” JPMorgan analyst Toby Ogg said in a note on Wednesday.

Analysts from TD Cowen echoed the positive sentiment.

“We remain constructive on SAP’s ability to weather through choppy macro conditions and for the model to continue to see growth acceleration alongside ample margin expansion,” said Derrick Wood, who raised the price target to $320 from $315.

German bank Metzler’s Pascal Spano also suggested that the latest results are indicative of the company and management’s ability to perform in a downturn.

“Cloud revenue and Current Cloud Backlog continue to see good momentum, posting solid demand across all verticals despite current uncertainties,” Spano told clients in a note after the results were released.

— Chloe Taylor, Ganesh Rao

SAP announced Wednesday that its first-quarter operating profit had risen by 58% year-on-year in constant currency to hit 2.5 billion euros ($2.9 billion).

The German software giant, which last month overtook Novo Nordisk to become Europe’s most valuable public company, said revenue had jumped 11% to 9 billion euros, with its cloud backlog up 29% year-on-year.

Earnings per share jumped 79% on an annual basis to 1.44 euros.

SAP CEO Christian Klein said in a statement that the results showed “our success formula is working.”

“SAP’s business model remains resilient in uncertain times,” he said. “Our AI-powered portfolio enables companies to navigate supply chain disruptions in over 130 countries and to unlock efficiencies with agility and speed.”

— Chloe Taylor

Swedish vehicle manufacturer Volvo said on Wednesday that its net sales contracted by 7% year on year in the first quarter of 2025, citing U.S. President Donald Trump’s tariffs regime.

Vehicle sales were 9% lower on an annual basis, the company said, while the underlying service business had grown by 2% from the previous year.

“As the quarter went by, there was increased uncertainty surrounding tariffs and their effect on global trade,” Martin Lundstedt, President and CEO of Volvo, said in a statement alongside the quarterly report.

“The lower vehicle volumes affected our profitability, but we nonetheless generated an operating income of SEK 13.3 billion ($1.39 billion) with a margin of 10.9%.”

A year earlier, quarterly operating income came in at 18.2 billion Swedish krona, while Volvo’s operating margin had stood at 13.8%.

— Chloe Taylor

Spot gold fell Wednesday after crossing the $3,500 for the first time earlier in the week, following U.S. President Donald Trump’s conciliatory comments on the U.S’ trade relations with China as well as the Federal Reserve chair.

The precious metal had slid 0.55% as at 8.50 a.m. Singapore time to trade at $3362.85 per ounce.

— Amala Balakrishner

President Donald Trump said that he has “no intention” of firing Federal Reserve Chair Jerome Powell.

When asked whether he had intentions of removing the central bank leader, Trump said, “None whatsoever.” The president spoke at the Oval Office late Tuesday.

Stock futures opened sharply higher after Trump’s comments, with Dow futures surging 500 points.

Powell’s term as Fed chair will end in May 2026.

—Kevin Breuninger, Darla Mercado

European markets are expected to open higher on Wednesday as global market sentiment rebounds following a bout of volatility.

The U.K.’s FTSE 100 index is expected to open 86 points higher at 8,418, Germany’s DAX up 457 points at 21,739, France’s CAC 84 points higher at 7,402 and Italy’s FTSE MIB 446 points higher at 35,906, according to data from IG.

Earnings are set to come from NatWest and Heathrow on Wednesday. Data releases will include the latest purchasing managers’ index data on activity in the euro zone’s services and manufacturing sectors.

— Holly Ellyatt