SAP Named BofA's Top European Software Pick for 2026 Amid Focus on AI Resilience

Bank of America has released its top picks in the European software sector, naming German enterprise giant SAP (ETR:SAP) as its leading large-cap investment for 2026. The firm's analysis prioritizes companies with robust growth prospects and business models that offer relative insulation from the disruptive risks posed by artificial intelligence.

SAP Leads the Pack

BofA analysts reiterated their Buy rating on SAP and raised the company's price target to €223 from a previous €208. According to the bank, this increase is supported by an upward revision of its target cloud multiple to 20x 2027 EBITDA, up from 18x. SAP was also featured on Bank of America's broader "25 stocks for 2026" list.

The firm highlighted SAP's valuation as a key factor, noting that the shares trade at 16.7x 2026 EV/EBITDA. This implies an EV/EBITDA-to-growth ratio of 1.1x, which BofA considers attractive compared to the European peer average of 1.5x, given SAP's projected revenue and EPS compound annual growth rates (CAGR) of 11.3% and 18% through 2028, respectively.

Growth and Defense Drive Other Selections

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Beyond SAP, Bank of America identified several other software companies with favorable outlooks, consistently emphasizing growth and resilience to AI.

• Temenos (SIX:TEMN): BofA maintained its Buy rating, citing a visible mid-term revenue outlook and lower AI disruption risk. The firm sees 1-3% upside to consensus mid-term EBIT estimates.
• Sage (LON:SGE): Following strong third-quarter results, analysts upgraded their FY26 organic top-line growth forecast for Sage by 40 basis points to 10.1%. The firm projects an approximate 18% EPS CAGR through 2028.
• Planisware (EPA:PLNW): The price target was raised to €31 from €30. BofA noted the company's complex workflows provide protection from AI, while it is poised for strong revenue and EBITDA growth of 15% and 17% CAGR to 2028, respectively.
• Nemetschek (ETR:NEM): With a price target lifted to €93 from €91, the firm sees the architecture and construction software industry as relatively safe from AI disruption, with potential for Nemetschek to monetize AI through new pricing models.
• TeamViewer (ETR:TMV): The firm maintained its Buy rating and €9.7 price target. Analysts view the company's partnership with ServiceNow as a key strategic move to counter potential disintermediation threats.

What It Means for Investors

Bank of America's selections underscore a focus on established software companies with clear growth trajectories and durable business models. For investors, the analysis suggests that while AI presents a long-term risk for some parts of the software industry, companies with complex, integrated products and strong market positions are well-equipped to navigate the changing technological landscape.