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Speaker 1: Bloomberg Audio Studios, podcasts, radio news, The.

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Speaker 2: Stock Movers Report, your roundup of companies making moves in

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Speaker 2: the stock market, harnessing the power of Bloomberg Data.

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Speaker 1: Let's look at some of the stocks on the move

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Speaker 1: today in Europe. I'm Lizzie Burden with Stephen Carroll and

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Speaker 1: rejoined by Bloomberg reporter Chloe Melly. Chloe, I'm looking at

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Speaker 1: SAP shares down ten point eight percent. It's a dramatic

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Speaker 1: round turn. This is the most valuable software company in Europe.

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Speaker 1: How did it get here?

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Speaker 3: Yeah, it's a very very bad day forair SAP.

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Speaker 4: So the reason why it's done so much today is

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Speaker 4: because the growth the growth are in its cloud backlog

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Speaker 4: disappointed investors quite a lot and was below the company's

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Speaker 4: at target. And so that's a big problem given that

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Speaker 4: the cloud business is absolutely essential to SAP's a strategy,

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Speaker 4: and the CEOs started this pivot a few years ago,

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Speaker 4: back in twenty twenty, from selling software licenses at that

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Speaker 4: clients would operate on local servers to offering software subscriptions

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Speaker 4: that were in the cloud directly. So that was a

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Speaker 4: move that investors were really keen on at first, and

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Speaker 4: the share price actually hit a record last year on

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Speaker 4: the back of that, but now there are some concerns

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Speaker 4: around the potentially negative impact of artificial intelligence on that strategy.

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Speaker 4: There's worries that AI powered tools can potentially displace what

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Speaker 4: enterprise software companies like SAP can actually offer, and SAP

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Speaker 4: is trying to kind of get ahead of this and

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Speaker 4: offer customers AI applications in the cloud, but then you know,

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Speaker 4: the disruption from new entrants into the market is.

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Speaker 3: Still a threat.

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Speaker 4: And this disappointing cloud growth backlog is it was taken

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Speaker 4: as very very disappointing from investors, and despite the fact

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Speaker 4: that it also announced a ten billion or a buyback,

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Speaker 4: the shares are still way down. So that really tells

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Speaker 4: you the extent of how disappointed investors were, because usually

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Speaker 4: buybacks get them quite excited.

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Speaker 2: Yeah.

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Speaker 5: Indeed, and in case anyone's a bit believed by the

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Speaker 5: term cloud backlog, this is services essentially that they have

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Speaker 5: contracted and sold but not yet recognized as revenue. So

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Speaker 5: it's the indicator, as you say, Chloe, of the revenue

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Speaker 5: that will come down the line from cloud for the company.

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Speaker 5: So that's why it's getting so much focused today. But

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Speaker 5: we want to turn next to st Micro's results beating estimates,

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Speaker 5: how are investors receiving them?

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Speaker 3: Yeah, it seems that software with SIP he's not doing

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Speaker 3: too well.

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Speaker 4: But then the hardware part of that tech market is

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Speaker 4: so st Micro is a supplier of chips for a

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Speaker 4: Tesla and Apple and then also to industrial companies and

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Speaker 4: car makers, and its outlook for sales in the first

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Speaker 4: quarter was ahead of expectations, and that was seen as

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Speaker 4: a sign that there's a recovery potential recovery in those

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Speaker 4: end markets. And this also echoes the results that we've

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Speaker 4: got from Texas Instruments, which is a company over in

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Speaker 4: the US, which also reported this week and also provides

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Speaker 4: those chips mostly to customers that are not AI customers,

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Speaker 4: to industrial, automotive, personal electronics clients, and so the outlook

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Speaker 4: for the first quarter from that company was also surprising good.

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Speaker 4: And so this indicates that those customers in industrial and markets,

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Speaker 4: automotive and markets have started to work through the massive

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Speaker 4: inventory that accumulated post pandemic and are starting to buy

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Speaker 4: again and invest again.

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Speaker 3: So it seems that chip demand is picking.

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Speaker 4: Up beyond AI, although it's still worth noting that the

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Speaker 4: auto sector is still a little bit weaker, but this

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Speaker 4: is quite encouraging for the sector as a whole. Now.

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Speaker 1: Clariy Deutsche shares are down two point eight percent. Deutsche

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Speaker 1: Bank out with earnings this morning, but it seems they've

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Speaker 1: been overshadowed by that.

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Speaker 3: Raid on them.

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Speaker 4: Yeah, so at first onance, it looks really positive for

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Speaker 4: Doutsche Bank.

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Speaker 3: As you said, there's strong earnings, really.

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Speaker 4: Solid fixed income trading, a one billion euro buy bag.

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Speaker 4: But the problem is that, as you said, the results

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Speaker 4: were overshadowed by this raid on the on the Dotchebak offices,

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Speaker 4: which happened just yesterday.

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Speaker 3: And this is a probe that is around money laundering.

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Speaker 4: It's centered around it's said to be centered around the

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Speaker 4: past dealings of staff members with firms that were linked

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Speaker 4: to Roman Abramovich, who is now sanctioned. And this is

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Speaker 4: really a fresh headache for the CEO. And it's not

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Speaker 4: the only kind of legal challenge that he is facing

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Speaker 4: at the moment. There's also another lawsuit which was filed

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Speaker 4: by a group of former managers that alleged that they

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Speaker 4: were wrongfully blamed in an accounting scandal at Montepesci. So

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Speaker 4: there's a few different challenges that the Dotche Bank is facing,

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Speaker 4: and those are taking center stage now. And unfortunately for

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Speaker 4: the bank, the great results that they posted were just

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Speaker 4: maybe not enough to make investors forget about those illegal

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Speaker 4: headaches coming down the line.

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Speaker 2: The Stock Movers report from Bloomberg Radio. Check back with

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Speaker 2: us throughout the day for the latest roundup of companies

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