SAP’s Silent Stretch Narrows as Earnings Date Brings Dremio and Sector Shifts into Focus

A countdown is underway for SAP investors, with the July 23 release of second-quarter results promising to break weeks of forced corporate silence. The software giant’s stock remains under severe pressure: at Wednesday’s close of €136.12, the shares have shed 32.61% since January and trade only 4.07% above their 52-week low of €130.80, set in late June. The gap to the 52-week peak of €265.75 stands at 48.78%.

The quiet period that began on June 22 has left the market without guidance from Walldorf, amplifying sensitivity to external signals. A recent warning from US rival IBM about soft software revenue reinforced fears that corporate IT budgets are being redeployed aggressively: money once earmarked for traditional licenses is flowing into AI infrastructure such as servers, storage, and chips. ASML, by contrast, raised its outlook on booming semiconductor demand, illustrating a bifurcation where hardware thrives while legacy software vendors struggle for wallet share.

SAP’s own AI ambitions rest on bridging that divide. A study conducted with Oxford Economics found that companies expect an average ROI of 21% from AI projects by 2026, rising to 38% by 2028, with agentic AI – systems that execute autonomous business tasks – seen as a key driver. Yet 73% of surveyed firms cited incomplete data as the biggest obstacle. SAP, owning the digital backbone of many enterprises, is betting it can orchestrate those data flows. The acquisition of Dremio, completed on July 6, adds a data-lakehouse platform that allows AI workloads to run directly on existing data without conversion, complementing the earlier Reltio purchase. Whether these deals have begun to lift margins will be a central question when the Q2 numbers land.

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

A separate strategic challenge stems from Brussels. The European Commission accepted SAP’s commitments regarding on-premise maintenance and support, granting customers ten years of flexibility to remain with legacy systems. While the settlement ends regulatory uncertainty, it risks slowing the cloud migration that SAP has been pushing. Gartner estimates that more than 10,000 customers will still be using the old ECC environment in 2030, forcing SAP to balance the lucrative on-premise service revenue with its cloud-first narrative.

The technical picture offers little relief. The stock sits 23.21% below its 200-day moving average of €177.27, confirming a persistent downtrend, and 5.61% under the 50-day average of €145.07. The relative strength index of 43.2 is neutral – not oversold despite the months of decline. Annualized 30-day volatility of 34.6% underscores the elevated nervousness in the software sector.

One stabilizing factor is the ongoing share buyback. According to May’s annual meeting documents, a further billion-euro tranche is expected to be completed by the end of July, coinciding with the earnings date. That timing could provide a floor as investors parse the numbers.

When SAP releases its report at 22:05 CEST on July 23, the management will finally break its silence. The market will look for evidence that the Dremio and Reltio integrations are gaining traction, that cloud momentum is holding despite the EU concession, and that the company can still capture a slice of the IT budgets now being reshuffled by the AI boom. The results will determine whether the stock’s deep discount is an opportunity or a warning.

Ad

SAP Stock: New Analysis - 15 July

Fresh SAP information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated SAP analysis...

en | DE0007164600 | SAP’S | boerse | 69775487 |