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Software giant SAP upgrades outlook as CFO says DeepSeek is 'good news'

German tech giant SAP on Tuesday upgraded its financial outlook for the full year asartificial cloud computing and artificial intelligence operations fueled growth.

Europe's largest software maker now expects operating profit on a constant currency basis in 2025 to be between 10.3 billion euros ($10.7 billion) to 10.6 billion euros, up from a previous target of 10.2 billion euros. The firm also expects an acceleration in cloud revenue growth.

Adjusted operating profit rose 25% to 8.15 billion euros in 2024, above the 22% increase flagged in a company-compiled analyst poll.

Revenue from the firm's core cloud and software businesses rose 11% for the period, also slightly ahead of consensus estimates.

CFO Dominik Asam told CNBC's "Squawk Box Europe" on Tuesday that the company is running "very much according to plan," as this year's outperformance already ticks all the boxes of their 2025 "ambition" plan set out in October 2020.

"We have all reasons to be optimistic on executing on these targets," Asam added.

Analysts at JPMorgan said the upgrade was ahead of expectations. Shares of the firm hovered around the flatline in the morning and was last trading down 0.9%.

Chinese startup DeepSeek's AI app this week sparked concerns over competitiveness in artificial intelligence leading to a majormarket sell-off.

Asam told CNBC the developments from DeepSeek were actually "good news" for SAP.

AI is becoming a key part of the business, with the tech accounting for half of SAP's cloud order entry in the fourth quarter, CEO Christian Klein said in Tuesday's release. SAP's position in data and "Business AI" gives the firm "additional confidence" in driving growth through 2027, Klein said.

Asam added that the firm is always looking to upgrade

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