SAP’s Record Cloud Backlog Sparks a 9% Rally, but the Underlying Trend Still Points Lower
Published on 07/25/2026 at 10:02 | Redaktion boerse-global.de
The sharpest single-day gain in months has jolted SAP’s stock back to life, yet the question hanging over the German software giant is whether Friday’s surge marks a genuine turning point or merely a brief reprieve from a punishing downtrend.
Shares closed at €140.80, up 9.15 percent, after the company revealed that its cloud backlog — the value of signed but not yet recognized revenue — had swelled to €22.929 billion in the second quarter of 2026. On a currency-adjusted basis, that represents 27 percent growth, a figure that silenced critics who had questioned whether SAP could hold its own against specialized cloud rivals in the race to embed artificial intelligence.
Even so, the stock remains 32.42 percent in the red since January 1. The rally has narrowed the distance to the 50-day moving average at €144.01, a level now just 2.23 percent above the closing price. A sustained break above that threshold would offer the clearest technical evidence that the medium-term downtrend is losing its grip. For now, the shares still trade nearly 19 percent below their 200-day average, a stark reminder of how far they have fallen.
The Cloud Engine Is Humming, but AI Costs Are Biting
The core tension inside SAP has not gone away. The company can post double-digit cloud revenue growth — management narrowed its 2026 cloud sales guidance to a range of €25.8 billion to €26.2 billion, implying as much as 25 percent expansion — but the price of that growth is heavy upfront spending on artificial intelligence.
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Acquisitions of Dremio and Prior Labs are consuming cash in the near term, and the group has trimmed its 2026 operating profit forecast to between €11.8 billion and €12.2 billion on a non-IFRS basis. That modest downgrade has kept some analysts cautious, even as houses like Barclays and TD Cowen maintain bullish price targets of $255 and $210 respectively.
Chief financial officer Dominik Asam has taken steps to prevent AI costs from spiraling. According to reports, SAP is rolling out an internal budgeting system that allocates monthly AI usage allowances to employees based on their role, with caps ranging from €100 to €5,000. The mechanism is designed to keep margin erosion in check while the company pushes ahead with its “Business AI” strategy.
Leadership Concentration Adds a Layer of Risk
The departure of product chief Muhammad Alam has prompted CEO Christian Klein to consolidate oversight of both AI strategy and product development under his own remit. That centralization of decision-making creates what some observers describe as a key-man risk: if strategic missteps occur, there is no obvious buffer in the executive suite.
Geopolitical uncertainty adds another variable. Asam has pointed to instability in the Middle East as a factor that is slowing some customers’ purchasing decisions, potentially delaying large contracts that would otherwise feed the backlog.
What Comes Next
For the rally to build momentum, the stock must hold above €140. A slip back below €130 would put the 52-week low of €127.52 — touched just last week on July 23 — back in play, confirming that the year’s downward bias remains intact.
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The next concrete catalyst arrives in the third quarter, when SAP aims to have 50 AI assistants ready for deployment. By the end of 2026, the company expects to field more than 400 autonomous suite agents. CEO Christian Klein noted that over 90 percent of top-tier deals now include AI components, a statistic that underpins the narrative of SAP as an “autonomous enterprise” in the making.
Whether those AI tools translate into measurable efficiency gains for customers — and, by extension, sustained revenue growth for SAP — will determine whether Friday’s spike becomes the start of a recovery or fades as a one-day relief rally in a stock that has yet to find its footing.
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