Halls of Shrewd'm / US Policy
No. of Recommendations: 6
No. of Recommendations: 6
SAP, whose headquarter coincidentally is 20km away from me, close to Heidelberg, is a - outside Germany - for it´s size and importance far underrated global giant,nearly a "hidden giant" in relation to their importance for the foundation they provide for the infrastructure of companies and government agencies worldwide. Their products are (invisible for most) everywhere.
If you look at them regarding falling knifes, you also should look at Microsoft. Down 12% this moment, 18% the last 1/2 year. Palantir is sinking too since a while. Interesting times indeed.
No. of Recommendations: 8
Palantir is sinking too since a while. Interesting times indeed.
Oh, I'll pass on that one : )
Even at the new lower price Palantir is apparently still the most overvalued company of all human history, at least based on the company as it exists rather than stories. 100 times sales seems a bit rich for me.
Jim
No. of Recommendations: 1
I agree, Palantir is my only short position. I've shorted the stock and own puts. So far so good...
No. of Recommendations: 0
Same here. My Palantir puts are doing well. Mentioned it to point out Palantir as THE symbol of overvalued stocks sinking might be a sign of changing times, of falling knifes coming.
No. of Recommendations: 6
Even at the new lower price Palantir is apparently still the most overvalued company of all human history, at least based on the company as it exists rather than stories. 100 times sales seems a bit rich for me.
That and the water they carry for the fascist state.
No. of Recommendations: 8
Is it for you, for CrankyCharlie and others really sooo difficult to abstain from using every opportunity to broadcast your political opinions on boards they don´t belong to? Nothing learned after all those years here?
No. of Recommendations: 7
Oh, I’m sorry. I thought we were talking about reasons not to invest in this POS.
No. of Recommendations: 5
Oh, I’m sorry. I thought we were talking about reasons not to invest in this POS.
Actually I was hoping somebody was going to say insightful stuff about SAP : )
Jim
No. of Recommendations: 2
This article
https://archive.ph/SCcKxis Germany´s "WELT" magazine is long. It describes SAP´s moat --- for beginners in SAP. So you might already know all of that - or might still be a bit surprised how large that moat is.
Unfortunately the German article is far too long for me to let it part by part translate by google/deepl. Too much copy/paste work. Maybe someone with a subscription can do it and post the result.
No. of Recommendations: 7
Here's a long-ish summary of the article. I'm not sure there's a lot of meat in it.
SAP is one of the most powerful corporations in the global economy. Many people are familiar with its applications from everyday office life--for planning business trips or submitting expense reports, for example. But SAP's software is deeply embedded in companies, usually out of sight.
Ninety-nine of the world's 100 largest companies are SAP customers and around 40% of global economic output runs on SAP systems, from energy and utilities, pharmaceuticals, and banking to intelligence agencies, the military, governments, and law enforcement. The logistics and operational readiness of entire NATO armies depend on SAP systems.
In China, SAP is gradually expanding its cloud activities and deepened its partnership with the Alibaba Group this year. The goal is to attract more and more Chinese companies to its products.
Recently, Klein traveled to the United Arab Emirates, where he met with the UAE's National Security Advisor. They discussed strategic directions for AI and sovereignty and how SAP can support these developments. SAP also plans to invest €20 billion in a sovereign cloud for Europe to help European companies compete globally and become less dependent on external influences.
The question, however, remains: will this actually work? A significant portion of the computing power SAP needs for its services comes from the USA, specifically from the data centers of Microsoft, Google, and others. Klein has repeatedly emphasized that SAP shouldn't build its own AI data centers. He's argued that opposing the infrastructure of hyperscalers is pointless. Critics say that this means that sovereignty in Europe may exist on paper, but not necessarily in reality. How can it be prevented that data ultimately flows out and control shifts elsewhere when the computing power resides on servers in the USA?
According to SAP, they have built a layer into their software to prevent data collected in Europe from flowing further. And laws also prevent misuse--at least in theory. Many businesses may desire full-stack alternatives that they can completely control themselves, however.
Criticism of SAP has recently intensified. This spring, the company ended its diversity programs in the US under threat from Trump. In doing so, SAP abandoned initiatives focused on gender diversity and the advancement of women. SAP is also facing several lawsuits and legal proceedings. The software manufacturer 09 is suing SAP in the US. The allegation: former employees, now working at SAP, stole trade secrets. SAP has also been engaged in a legal battle with Celonis, which accuses SAP of illegal business practices and anti-competitive behavior. The European Commission also opened an antitrust investigation against SAP.
If all goes well, SAP, as the architect of digital sovereignty in Europe, will lay the foundations for this future and thus become even more influential. What remains is the question of how SAP will, or even can, separate economic interests from geopolitics. After the start of the war against Ukraine, the company shut down its business in Russia. Will this also happen if China attacks Taiwan? Unclear. The only certainty is that SAP operates agilely, adaptably, and largely invisibly.
No. of Recommendations: 0
SAP 25xFCF
CRM 15xFCF
No. of Recommendations: 8
SAP 25xFCF
CRM 15xFCF
re Salesforce---
Though valuing a firm isn't always quite so simple, it's also worth adding that their ten year average market valuation level is about 30x cash flow. Given what they might expect to make this year on that front, reversion to that multiple might lead one to expect a late 2026 price in the vicinity of $450 rather than the current $196. That's not a prediction, just if-this-then-that.
I don't really know the firm deeply beyond the obvious: great balance sheet, high profitability, still growing well. Not conventionally cheap but much cheaper than usual for them. Naively, the recent weakness seems more than anything else based on the problem that they aren't an AI poster child so the money got bored and drifted away. Like trying to survive the markets in 1999 without ".com" in your company name.
Jim
No. of Recommendations: 2
Possibly, I was pointing out that Salesforce may be a better op having similarly been beaten down and noticed there has been buying from from "superinvestors". CRM was a darling a few years ago, who'd have expected a 15xFCF multiple but here we are.
No. of Recommendations: 4
Possibly, I was pointing out that Salesforce may be a better op having similarly been beaten down and noticed there has been buying from from "superinvestors". CRM was a darling a few years ago, who'd have expected a 15xFCF multiple but here we are.
For sure, your point is valid.
For both of them I guess some people think "Oh, companies won't need those databases hosted or to rent those software modules any more because they can just as questions of the AI". I'm not buyin' it, at least not for the SAAS biggies that are bound so firmly to their clients.
Between the two, the main advantage for me is SAP is not American.
Jim
No. of Recommendations: 1
FWIW, I noticed that two SAP executives bought ~1.4MM stock after the sell off.
No. of Recommendations: 2
Just read SAP intends buybacks for €10 Billion.
