German software corporation SAP has surpassed Danish pharmaceutical corporation Novo Nordisk to become the highest-valued company in Europe. Reports analyze that SAP's dramatic stock price increase has lifted the entire German stock market, contributing to the German benchmark index hitting an all-time high.
According to the Financial Times (FT), SAP secured its position as the most valuable listed company in Europe on the 24th (local time). It has overtaken Danish pharmaceutical corporation Novo Nordisk to claim the top spot in market capitalization. SAP's stock price has risen about 60% over the past year, and on the 24th, the stock price increased by 1.35%, resulting in a market capitalization of 316.1 billion euros (approximately 502 trillion won). On the same day, Novo Nordisk's stock price fell by 1.34%, with a market capitalization of approximately 2 trillion kroner (approximately 436 trillion won).
SAP is a corporation based in Germany that specializes in enterprise software. It develops enterprise resource planning (ERP) systems and provides them to more than 100,000 corporations worldwide. Last year, it surpassed Dutch semiconductor equipment corporation ASML to become the largest technology corporation in Europe.
Recently, active investments in the cloud transition of enterprise software and the integration of generative AI have heightened expectations, drawing investor interest. The securities market has projected that SAP's cloud revenue will grow by 29% this year, and total revenue is expected to increase by 13% year-over-year, reaching 38.5 billion euros (approximately 62 trillion won), according to FT.
SAP's stock price increase has driven the rise of the German benchmark index DAX, contributing to the German stock market reaching an all-time high. SAP holds a larger share in the DAX index compared to Germany's main industries, such as automotive (Volkswagen, Mercedes, etc.). Due to SAP's stock price increase, this share frequently exceeds the single-stock cap of 15%, prompting the Frankfurt Stock Exchange to introduce a new index without a cap.
Meanwhile, Novo Nordisk has maintained the top spot in market capitalization among European corporations until recently due to the success of its obesity treatment 'Wegovy'; however, its upward momentum has stalled due to supply chain issues and market adjustments. Notably, after its stock price plummeted about 20% in a single day last December, the downward trend has continued, with the recent stock price being 30% lower than just before the sharp drop. To respond to a surge in demand, Novo Nordisk is expanding production facilities in places like Belgium. However, FT noted that supply bottlenecks in the U.S. and intensified competition may act as a burden on short-term growth.