** European software stocks rise sharply, extending a recovery and pushing SAP SAPG.DE to a 10-week high, as a rally in U.S. peers offers relief to a sector hit by AI disruption concerns

** SAP, Europe's largest software firm by market value, rises 4.8%, while Sage SGE.L, Dassault Systemes DAST.PA, Nemetschek NEKG.DE and Temenos TEMN.S gain around 3%, leading advances in European tech .SX8P

** Traders say gains point to possible stabilization after weeks of heavy selling, as valuations have reset and companies address AI risks, though volatility remains high

** A London-based broker says the move is partly driven by short covering

** SAP is down more than 21% year to date, while many peers are also down double digits

** U.S. software stocks look set to extend Friday's gains, with Microsoft MSFT.O, ServiceNow NOW.N and Salesforce CRM.N up sharply premarket