SAP Faces a Pivotal July 23 as Legal Woes and Margin Pressures Overshadow Solid Cloud Growth
28.06.2026 - 12:11:41 | boerse-global.de
SAP investors are heading into a critical week with the stock trading near its 52-week low, even as the company’s cloud business continues to expand at a double-digit clip. Shares closed Friday at €136.16, a four percent bounce from the previous session but still a staggering 49 percent below the €266.00 high recorded a year ago. The year’s trough of €130.80, set on June 25, sits just four percent beneath the current price, underscoring how fragile the recovery remains.
The disconnect between operational performance and market valuation is stark. In the first quarter, cloud revenue surged 27 percent on a currency-adjusted basis to €5.96 billion, accelerating from the prior quarter’s pace. The cloud backlog climbed 20 percent to €21.9 billion, and earnings per share rose from €1.52 to €1.66. For the full year, SAP targets cloud sales between €25.8 billion and €26.2 billion. Yet the share price has shed roughly a third of its value since January, battered by a confluence of headwinds that go well beyond the quarterly numbers.
A Legal Storm Gathers
The most potent near-term threat may be the antitrust battle with process-mining firm Celonis. A federal judge in San Francisco has set a trial date of December 7, 2026, after dismissing only parts of SAP’s motion to throw out the case. Celonis alleges that SAP is blocking rivals from accessing customer data in order to favor its own Signavio product. The discovery phase will allow Celonis to demand internal documents covering APIs, pricing, partner programmes and RISE contracts. SAP has said portions of the complaint were tossed out and vowed to “vigorously defend ourselves,” but the litigation now looms large over the stock.
Separately, the European Commission is examining concessions offered by SAP — including giving customers more freedom to choose alternative providers and scrapping certain fees. SAP has said it expects no material financial impact from those measures. Still, the regulatory backdrop adds another layer of uncertainty as the quiet period begins.
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Analysts Trim Expectations Even as They Stay Bullish
Sell-side confidence remains intact at many houses, but the tone has grown more cautious. Goldman Sachs shaved its forecast for SAP’s second-half 2026 gross margin from 73.3 percent to 72.8 percent, citing higher hardware costs and weakness at a large Middle Eastern customer that is expected to scale back its activities. That client drag will continue to weigh on cloud revenue growth into the second quarter.
Jefferies’ Charles Brennan cut his price target from €230 to €210 but held his buy rating, pointing to a tough environment for European software firms. UBS’s Michael Briest kept his target at €205 and a buy recommendation, though he warned that margin improvements in Q2 may be less dynamic than in the first three months. The consensus price target across nine analysts stands at €218.75 — implying more than 60 percent upside from current levels, a gap that reflects both optimism and the deep discount the market is applying.
The sector-wide jitters were exacerbated by Accenture’s recent revenue forecast cut, which prompted many enterprise customers to delay large IT projects. Meanwhile, Oracle’s plan to spend $95 billion on AI infrastructure through 2027 is raising the stakes for SAP to keep pace on investment, potentially squeezing margins further.
Buyback Provides a Floor, But Not a Catalyst
SAP has been buying back shares since February 2026 under a programme that can reach €10 billion by the end of 2027. In the first tranche it repurchased about 16.3 million shares at an average price of €161.16 — well above the current quote, meaning the company is effectively acquiring stock at a discount to its own earlier purchases. The budget for that initial tranche was up to €2.6 billion. While the buyback offers some support, it has not been enough to arrest the downtrend. The 200-day moving average sits at €183.34, roughly 26 percent above Friday’s close, a clear reminder of the technical damage.
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The July 23 Reckoning
With the quiet period now in effect since June 22, management is barred from commenting on business trends or guidance until second-quarter results are released on July 23. In the interim, SAP’s stock will be at the mercy of sentiment in the European tech sector, where names like Salesforce and ServiceNow have also come under pressure as investors scrutinise AI monetisation across the industry.
One long-term bright spot that has done little to lift the shares near term: SAP, together with Deutsche Telekom, won a contract to build a sovereign AI cloud platform for Germany’s federal, state and local governments. The Federal Digital Ministry is putting up €250 million as part of the so-called Deutschland-Stack. It is a signal of where SAP sees future growth, but with the stock priced for near-term pain, the market is focused on what comes out of the quarterly report — and whether the margin fears prove justified or a buying opportunity.
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