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Investing.com -- European software companies are positioned for strong performance in 2026, with several standout performers identified in Bernstein’s latest analysis. The firm highlights three companies with particularly promising outlooks based on growth trajectories, margin expansion potential, and industry positioning.
SAP leads Bernstein’s rankings with an Outperform rating and a price target of €297. The German software giant presents one of the best risk/reward ratios in the sector according to analysts, who project accelerating double-digit revenue growth over 2026-27. This growth is expected to be accompanied by rapid margin expansion, positioning SAP as the top European software investment for the coming year.
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Here’s a closer look at Bernstein’s top European software picks:
SAP was rated Outperform with PT at €297. Analysts believe SAP offers one of the most attractive risk/reward profiles in the European software sector. The company is projected to achieve accelerating double-digit revenue growth through 2026-27, complemented by significant margin expansion that should drive shareholder returns.
SAP has offered concessions to settle an EU antitrust investigation and is also facing potential cartel proceedings in Germany over data access claims. Separately, the company was sued by o9 Solutions over allegations of trade secret theft.
Capgemini rated Outperform with target of €225, will be in recovery in 2026, with accelerating organic revenue growth and improving margins. Despite potential integration challenges with WNS and possible pricing pressure from GenAI/Agentic AI, analysts believe volume growth should offset any price deflation. The stock currently trades at an average 35% discount on 2026-27 EV/EBIT compared to global services peers, which Bernstein views as excessive and potentially creating an attractive entry point.
Capgemini is facing potential impacts from new U.S. restrictions on H-1B visas, which include a significant fee increase for new applications.
Indra The Spanish technology company is expected to continue benefiting from increased European defense spending. Bernstein anticipates Indra will accelerate its revenue growth through both acquisitions and organic expansion while enhancing operating margins. The company plans to present a new strategic roadmap at its Q2 2026 Capital Markets Day, targeting €10 billion in revenue by 2029 – a full year ahead of its initial objective.
In a recent development, Indra Sistemas reported strong financial performance for its third quarter of 2025, with the company highlighting significant revenue and profit growth.
Bernstein’s analysis suggests these three European software companies are well-positioned to outperform the broader market in 2026, with each offering distinct growth catalysts and potential for shareholder value creation.
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