European Technology Companies Have Growth Potential: Here’s What Analysts Expect

Dan Ives: European Technology Companies Have Growth Potential Despite Challenges

Dan Ives of Wedbush Securities said that despite growing frustration among investors over Europe’s ability to develop technology companies, there are firms on the continent he remains optimistic about.

These include:

• German software giant SAP
• Chip-equipment supplier ASML
• Buy-now-pay-later company Klarna
• Music streaming platform Spotify

According to Ives, European equity markets are under scrutiny as local technology companies increasingly look to U.S. markets to pursue their ambitions.

“Europe is going through a moment of reckoning — can it compete as a technology hub,” he said. “I travel extensively across the continent and feel rising tension. Investors are watching what’s happening around the world and asking: ‘What about us?’”

Outlook for the Four Companies

Source: LSEG

SAP
SAP shares are down 11.4% in 2025, but analysts see significant upside potential. According to LSEG consensus data, the target price is €286.42, implying a potential gain of 35.9%.

Bank of America has included SAP in its list of “25 Stocks for 2026,” expecting the company to strengthen its artificial intelligence offerings and improve operational efficiency.

“Some of the things SAP is doing are truly impressive,” Ives commented.

ASML
The Dutch semiconductor equipment supplier, which manufactures advanced photolithography machines for cutting-edge chips, has gained 38.6% this year. The target price stands at €972.44, implying a potential upside of 2.6%.

“ASML is a key player in the AI space,” Ives said. Bank of America analyst Didier Scemama names the company as his top pick in the sector and expects an expansion in gross margins in 2027.

Klarna
Klarna shares have fallen 19% since their debut on the New York Stock Exchange in September, but analysts see substantial upside, with a target price of $45.63, representing a potential gain of 41.1%.

In its first earnings report after listing, the company beat Wall Street expectations for quarterly revenue, with growth driven mainly by the U.S. market.

Spotify
Spotify shares are up 33.9% in 2025. The company reported strong third-quarter results, beating forecasts and posting a 12% year-on-year revenue increase in November.

Analysts have set a target price of $754.87, implying a potential upside of 26.1%. Deutsche Bank forecasts that Spotify could raise subscription prices in 2026, which could add around 5% to revenues.