Beyond FAANG, German tech companies such as SAP, Finexity and TeamViewer also offer potential for your portfolio

SAP – Focusing on cloud and AI

SAP grew strongly in the second quarter, driven by strong cloud demand and disciplined cost control. Cloud revenue rose by 28% on a currency-adjusted basis, while the current cloud backlog grew by the same amount to EUR 18.1 billion. The cloud ERP suite in particular grew by 34%. Operating profit (non-IFRS) improved by 35%. Despite robust growth, the Company is maintaining its previous outlook for the full year and continues to closely monitor geopolitical and industry-specific developments.

In early August, SAP announced its planned acquisition of SmartRecruiters, a leading provider of talent acquisition software. The transaction was completed on September 11. The acquisition is intended to complement the SAP SuccessFactors HCM Suite with modern, AI-powered recruiting capabilities. This will provide customers with greater efficiency in their search for talent, shorter hiring cycles and better analytics. SmartRecruiters will initially remain available as a standalone solution. The deal highlights SAP's commitment to helping companies attract talent in a highly competitive environment.

In addition to solid quarterly figures, SAP is pushing ahead with strategic initiatives. Cloud migration continues to be of central importance – not only for technical reasons, but also because of cost efficiency and scalability. In addition, SAP is expanding its portfolio in the area of digital sovereignty, specifically for the European market, with cloud solutions that are fully compliant. Artificial intelligence plays a dual role. It reduces implementation costs while increasing operational efficiency through automation and improved data integration. The share is trading at EUR 219.45, close to the support level around EUR 216.00.

Finexity – Platform for tokenized assets

On September 5, Finexity AG successfully commenced trading in the m:access segment of the Munich Stock Exchange. As part of a capital measure, the Company placed shares with a volume of EUR 2.17 million, primarily with existing shareholders and selected professional investors. The listing is intended to increase visibility on the capital market and support the Company's development into a leading trading platform. The Hamburg-based company has positioned itself as a trading and settlement platform for tokenized private market investments. All types of assets, such as real estate, vehicles, etc., can be digitized using blockchain technology, enabling investors to participate in these assets.

In mid-August, Finexity already scored a strategic coup with the announced acquisition of 90.1% of Effecta GmbH. Effecta acts as a so-called liability umbrella in online securities distribution and, as a licensed securities institution, brings with it around 70,000 registered investors and a network of contractually bound intermediaries. The acquisition, which is still subject to regulatory approval, would significantly expand the ecosystem of both companies and open up cross-selling potential. At the same time, Effecta's managing director is also expected to play a central role in strategic development.

The main goal is to make the efficiency advantages of tokenization, such as reduced settlement times and automated processes, available to the private market. Finexity already operates with over 250 listed assets and 14,000 registered investors. The planned Effecta integration and the planned rollout of a distributed ledger technology (DLT)-based trading system with a multilateral trading facility (MTF) could provide additional momentum. The latter would generate revenue both from trading the assets and from connecting additional trading partners. The share price rose significantly on the first day of trading and is currently trading at EUR 48.80.

TeamViewer – Three reasons for a turnaround

TeamViewer's latest quarterly figures send surprisingly clear signals. Despite a challenging market environment, currency-adjusted revenue increased by 6%, while profitability rose significantly. Adjusted EBITDA grew by 17% and the margin climbed to an impressive 44%. This operational strength, which is primarily based on cost discipline and more efficient marketing, points to a solid foundation on which the Company can continue to build.

Strategically, TeamViewer has opened new doors with the acquisition of DEX specialist 1E. The integration appears to be proceeding according to plan, and the launch of "DEX Essentials" is now bringing the technology to small and medium-sized businesses. At the same time, the new "TeamViewer ONE" platform combines remote access, AI and endpoint management into a comprehensive offering. This product offensive could strengthen long-term customer loyalty and tap into new sources of revenue.

Artificial intelligence is a key growth driver. AI-based functions, such as the integrated Copilot for IT support, are designed to increase the efficiency of the solutions and establish a real competitive advantage. Combined with stable market leadership and an attractive valuation, many signs are pointing to a turnaround. Whether the turnaround succeeds now depends on whether these strategic initiatives generate the expected commercial momentum in the second half of the year. The stock is currently attempting to form a double bottom and is trading at EUR 8.855.

While US tech giants dominate the stage, selected German companies offer substantial growth potential. SAP is driving digital transformation with cloud and AI and delivering solid operating results. Finexity is establishing itself as a highly regarded platform for tokenized assets and is tapping into both new customer groups and synergies through the acquisition of Effecta GmbH. TeamViewer, in turn, is surprising with rising profitability and is focusing on AI-supported products for its turnaround. Investors would do well to keep an eye on the German tech sector beyond the established giants.