Is SAP SE (SAP) a Hidden Winner in the AI and Energy Infrastructure Boom?

In an era defined by rapid technological disruption and the global push for sustainable energy, SAP SE (SAP) has quietly positioned itself at the intersection of two transformative megatrends: artificial intelligence (AI) and energy infrastructure modernization. While the company's core identity as an enterprise software provider remains intact, its strategic pivot to cloud ERP systems-infused with AI capabilities and tailored for energy-sector needs-suggests a compelling case for indirect exposure to these high-growth areas. This analysis explores how SAP's innovations and partnerships could make it a hidden beneficiary of the AI and energy infrastructure boom.

AI Integration: From Copilot to Core Competency

SAP's 2025 cloud ERP roadmap underscores a bold commitment to AI-driven automation. At the heart of this strategy is Joule, an agentic AI framework designed to orchestrate task-specific agents across business functions. By integrating Joule into its SAP Cloud ERP Private 2025 platform, the company has enabled features like the Maintenance Planner for asset management and solution quotation management for sales, which leverage natural language processing to streamline operations.

Beyond internal capabilities, SAP has expanded its AI ecosystem through strategic partnerships. At SAP Sapphire 2025, the company announced a collaboration with Perplexity, an AI-powered answer engine, to enhance real-time data synthesis. This integration allows Joule to combine internal SAP data with global insights, delivering context-aware responses to business queries. Additionally, SAP's alliance with NEURA Robotics and NVIDIA is bringing AI into physical operations, such as predictive maintenance and compliance monitoring, by connecting Joule Agents with advanced robotics. These moves position SAP not just as a software vendor but as a key enabler of AI-driven industrial transformation.

Energy Infrastructure: Clean Core and Decentralized Solutions

The energy sector's shift toward renewable resources and decentralized systems has created a demand for agile, scalable ERP solutions. SAP's clean core extensibility approach-prioritizing standardized processes over custom code-enables energy companies to rapidly adopt innovations like AI and sustainability tools. For instance, E.ON Digital Technology implemented a cloud-based SAP ERP architecture that streamlined operations, improved transparency, and integrated AI for proactive decision-making. Similarly, Xcel Energy and Merit Energy have leveraged SAP's S/4HANA Cloud to manage distributed energy resources (DERs) and optimize grid operations.

SAP's AI-powered content generation and natural language search in SAP Datasphere further accelerate insights without requiring custom development. These capabilities align with the energy sector's need for real-time monitoring and compliance, particularly as companies adopt solar and other renewables as business value becomes clear. By addressing these pain points, SAP is becoming a critical infrastructure partner for energy firms navigating the transition to a low-carbon economy.

Onshoring and Cloud ERP: A Synergistic Trend

The global onshoring of energy infrastructure-driven by geopolitical shifts and sustainability goals-has increased demand for ERP systems that support localized operations. SAP's cloud ERP solutions, such as S/4HANA Cloud, are designed to facilitate this shift. For example, a large utility company executed a global rollout involving 40+ countries and 30,000 SAP users by adopting a Fit-to-Standard strategy, minimizing custom development and ensuring scalability.

While direct data on SAP's onshoring ERP adoption rates in the energy sector remains sparse, broader market trends are telling. SAP's cloud ERP revenue grew 27% year-on-year in Q1 FY 2025, reaching €5.0 billion, with the energy sector contributing to this growth through projects like SAP Sustainability Control Tower, which helps companies track carbon reduction progress. These developments suggest that SAP's cloud-first approach is well-aligned with onshoring imperatives, particularly in energy markets where agility and compliance are paramount.

Market Position and Financials: A Strong Foundation

SAP's financial performance reinforces its strategic positioning. In 2025, the global ERP market is valued at $73 billion, with cloud ERP accounting for 70% of the market according to market analysis. SAP holds a 6.57% share of the broader ERP market (€8.6 billion in revenue) and a 1.2% share in the energy sector as reported in industry analysis. While these figures may seem modest, they reflect SAP's focus on high-margin cloud solutions and its expanding partner ecosystem (25,000+ globally) as detailed in market reports.