SAP’s Friday Jump Offers Relief, but Earnings and Technical Levels Cap Enthusiasm

SAP shares have lost nearly half their value since hitting a 52-week high of €266, yet the company’s cloud business is churning out record numbers. The software giant on Friday staged a sharp reversal from Thursday’s 52-week low of €130.80, climbing 3.94% to close at €135.96. The bounce placed SAP at the top of the Euro STOXX 50 gainers, even as the DAX slipped 1.3% and Infineon shed almost 4%.

The trigger for the turnaround was a reassessment of the threat from new AI models. OpenAI’s release of GPT-5.6, internally dubbed Sol, Terra and Luna, signaled that cutting-edge AI will integrate with existing enterprise platforms rather than render them obsolete. That eased fears that disrupted SAP’s traditional licensing model, lifting sentiment for the Waldorf-based group alongside US rivals ServiceNow and Salesforce.

Yet the relief rally does little to alter the stock’s punishing trajectory. SAP is down roughly 33% year to date, and the 50-day moving average at €147.48 sits nearly 8% above Friday’s close — a formidable resistance level. The relative strength index of 41.4 indicates the stock is not overbought, leaving room for further recovery but also underscoring how weak momentum has been.

Should investors sell immediately? Or is it worth buying SAP?

CEO Christian Klein has inadvertently added to the uncertainty. In a recent interview he forecast a future where “nobody will be developing software anymore” within three to four years, a comment that stoked concerns about the long-term viability of license-based revenue. Analysts are divided in response. Jefferies cut its price target from €230 to €210 but maintained a buy rating, blaming a sluggish European software environment rather than company-specific issues. UBS and Berenberg remain buyers, with Berenberg targeting €215, while JP Morgan stays neutral and DZ Bank has recommended selling since April. Morningstar, however, awards SAP five stars as significantly undervalued, citing a sustainable competitive advantage.

Separately, SAP logged a regulatory win that could bolster its business with government clients. Germany’s Federal Office for Information Security (BSI) granted the company’s cloud infrastructure in Waldorf approval to process classified information at the “nur für den Dienstgebrauch” level. SAP says it is now the only provider on whose platform both its own applications and customer applications can be operated in compliance with VS-NfD standards. The certification is a stepping stone toward full ISO 27001 accreditation based on IT-Grundschutz, potentially unlocking defence and public-sector contracts over the longer term.

All eyes now turn to the half-year results due on 23 July. The quiet period began on 22 June, so no guidance or commentary will emerge before then. In the first quarter, total revenue rose 6% year on year to €9.56 billion, cloud revenue climbed 27% on a currency-adjusted basis to nearly €6 billion, and the cloud backlog reached €21.9 billion. The sticking point: even better-than-expected numbers have failed to spark sustained rallies recently. The question is whether SAP can convince sceptical investors that its cloud momentum is durable enough to offset the AI angst.

Short-term, the €130 level will be watched closely as potential support. A conference on data centres and AI infrastructure in Düsseldorf on 1–2 July, which will cover cloud strategy and energy supply, could provide thematic tailwinds. Industry studies cited at the event project consulting market growth of up to 8% in 2026, with AI as the primary driver. For now, Friday’s jump offers a breather — but the stock’s path depends on whether the AI narrative shift sticks and whether the upcoming earnings report can finally arrest the slide.

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