German software company, SAP has now become Europe’s largest company by market capitalization, surpassing Novo Nordisk.

On Monday SAP’s market cap reached $340 billion, slightly edging out Novo Nordisk, which is known for the weight loss drug Ozempic.

This marks a significant shift in Europe’s corporate landscape.

SAP’s growth to become Europe’s largest company is driven by the strong performance of its cloud business, which is poised to benefit from the growing investment in generative AI.

Europe’s largest software maker, known for its business application software for finance, sales, and supply chain functions, has seen a surge in its stock value, fueled by optimism about AI’s potential to revolutionize its offerings.

SAP shares have risen 7% in 2025, slightly trailing the European STOXX 600 index, which has gained 8.3% year-to-date.

However, SAP’s total return since the end of 2022 stands at an impressive 160%, far outpacing the STOXX 600’s 28% growth.

On the other hand, Novo Nordisk has seen its shares underperform recently, following disappointing trial results for its experimental obesity drug, Cagrisema, which failed to meet investor expectations.