SAP’s Strong Cloud Backlog and Google Alliance Fail to Halt Slide Near Year Low
22.06.2026 - 03:21:43 | boerse-global.de
The contrast between SAP’s operational strength and its share price has rarely been starker. The Walldorf-based software giant closed at €134.00 on Friday, within striking distance of its 52-week low of €132.26, even as its flagship cloud business continues to deliver double-digit growth. Since the start of the year, the stock has lost roughly 34% of its value — a sell-off that many analysts consider overdone.
What triggered the rout? A broad sector shock emanating from the US. Oracle’s announcement of massive investments in its AI infrastructure sent a chill through European software stocks, punishing companies not seen as immediate winners from the artificial intelligence boom. SAP, despite its own AI push, got caught in the downdraft. The market’s mood has turned unforgiving: any hint of spending on generative AI without a direct payoff is being penalised.
SAP’s fundamentals tell a different story. In the first quarter, revenue rose to nearly €9.6 billion, with cloud revenue climbing 27% on a currency-adjusted basis. The cloud order backlog swelled by a fifth to almost €22 billion, and management expects the full effect of the cloud transformation to materialise by 2027. Analysts describe the earnings as robust and note that valuations, by historical standards, are undemanding.
The company has also been active on the partnership front. SAP recently unveiled a collaboration with Google that integrates the search giant’s Gemini models directly into its cloud systems, creating a shared e-commerce architecture that lets businesses embed AI agents into sales processes. The potential savings are huge: Gartner estimates that such systems could save companies around $80 billion globally by the end of 2026. Yet the market barely acknowledged the deal, underscoring the deep scepticism currently gripping the sector.
Should investors sell immediately? Or is it worth buying SAP?
That scepticism is not universal. Leading research houses see the current price as a buying opportunity. Berenberg rates SAP a “Buy” with a €215 target, UBS also says “Buy” with a €205 target, and MarketScreener’s consensus price target is roughly €215. JP Morgan is more cautious with a “Neutral” stance, while the DZ Bank has a “Sell” recommendation. From a technical perspective, the stock is testing critical support. If the €132.26 level breaks, a further wave of selling could follow. The mid-term trend indicator sits around €148, meaning any recovery must first clear that hurdle.
Other developments add nuance to the story. SAP has applied to Germany’s Federal Cartel Office for approval to acquire a stake in Prior Labs, a start-up that develops AI-based analytics tools. Meanwhile, its US subsidiary SAP NS2 secured a high-level security certification for its cloud platform from US authorities — a significant win for the company’s sovereign cloud offering.
The next major catalyst arrives on 23 July, when SAP reports second-quarter results. Investors will scrutinise two metrics above all: the cloud order backlog and the cloud gross margin. Only clear evidence that expensive AI investments are translating into higher profitability can dispel the prevailing market doubt.
SAP at a turning point? This analysis reveals what investors need to know now.
The broader calendar also provides potential triggers. On Monday, the DAX undergoes its regular reshuffle, with Hochtief replacing Porsche Automobil Holding. On Wednesday, the Ifo business climate index offers a fresh read on sentiment in Germany’s IT sector. For now, though, the share price remains hostage to external forces — and the battle line has been drawn at €132.26.
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