SAP's Rally Faces Its Sternest Test: A Trimming Profit Outlook Meets a Red-Hot Cloud Engine
Published on 08/05/2026 at 12:11 | Redaktion boerse-global.de
The market's recent embrace of SAP stock is starting to look like a vote of confidence in the software giant's ability to reinvent itself — but the company's own guidance is telling a more complicated story. The shares have surged roughly 20 percent in the past month to €169.30, a sharp reversal from a year that had been firmly in the red. Yet even as investors cheer the momentum, SAP has quietly walked back its profit expectations for 2026, citing the cost of the very acquisitions meant to accelerate its artificial intelligence ambitions.
A Trimmed Target, a Fuller Pipeline
The revised outlook, delivered alongside second-quarter results, now calls for non-IFRS operating profit of €11.8 billion to €12.2 billion in 2026 — a step down from what the company had previously signaled. Management attributes the adjustment to dilution effects and integration expenses tied to the May-announced purchases of Dremio and Prior Labs, two data-focused firms meant to sharpen SAP's AI edge.
That short-term pain, however, is being offset by a cloud engine firing on all cylinders. Cloud revenue climbed 24 percent on a currency-adjusted basis to €6.28 billion in the quarter, while the current cloud backlog — the contractual revenue already locked in — expanded 27 percent to €22.9 billion. Those figures represent the strongest evidence yet that SAP's multi-year pivot from a traditional software licensor to a cloud subscription powerhouse is gaining traction, even if the transition carries a visible price tag.
The flip side of that transformation remains stark: software license revenue collapsed 32 percent to just €0.13 billion, a reminder that the legacy business is being cannibalized faster than ever. The market's verdict, at least for now, is that the growth story outweighs the margin drag. On Tuesday, the stock closed at €168.80, up 2.18 percent on the day.
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Klein's Cultural Crusade
CEO Christian Klein has framed the moment in broader terms than any single quarter. Speaking midweek, he warned that Europe is dangerously dependent on the United States and China when it comes to artificial intelligence — and positioned SAP's response as nothing less than a cultural shift. He has called for a new "performance culture" within the company and described the AI transformation as "bigger than the cloud transformation."
That ambition translates into concrete operational targets. SAP aims to make its software development 30 percent more productive through AI, and is hiring 400 to 500 specialized data scientists to lead the charge. The human cost is not being hidden: with roughly 112,000 employees worldwide, management has not ruled out further job reductions as automation takes hold.
For shareholders, the calculus cuts both ways. Productivity gains should eventually flow through to healthier margins, but a restructuring of this scale inevitably introduces organizational turbulence. The company's buyback program has helped steady the ship — SAP spent €344.3 million repurchasing 2,184,430 shares between July 27 and July 31 at a weighted average price of €157.62 each.
Insider Confidence and Family Alignment
Klein has been putting his own money where his mouth is. According to BaFin filings, the CEO acquired 2,434 SAP shares on July 24 at an average price of €133.60, a transaction worth just over €325,000. The timing looks prescient given the subsequent rally.
There has also been notable movement on the shareholder register. Harald Tschira's stake has jumped to 4.22 percent from 0.57 percent, while Udo Tschira now holds 4.19 percent, up from 0.54 percent, following new voting agreements within the founding family. The consolidation of influence among the Tschira family adds another layer of stability to the company's ownership structure.
The Technical Picture: Momentum Meets Resistance
The recent advance has been striking, but the stock remains a long way from its former glory. At current levels, SAP shares sit roughly 34 percent below their 52-week high of €257.70. The immediate technical battleground is the 200-day moving average — now at approximately €173.71 — which the stock is approaching with just 2.5 percent of upside remaining before it tests that level.
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That proximity cuts both ways. A clean break above the 200-day line would signal that the recovery has legs. But the Relative Strength Index has already climbed to 70, a reading that historically suggests the stock is overbought and due for a pullback before any sustainable breakout can occur. The shares are still down about 19.43 percent year-to-date, a reminder that the recent surge, while welcome, has only partially repaired the damage.
Analysts See Room to Run
Sell-side sentiment has turned supportive. Jefferies analyst Charles Brennan reaffirmed his buy rating on July 28 with a price target of €210.00, pointing to the better-than-expected cloud backlog as the key catalyst. That target implies meaningful upside from current levels, even after the recent run.
The next major checkpoint comes on October 21, when SAP is scheduled to report third-quarter results. By then, investors will have a clearer read on whether the cloud momentum can be sustained and whether the integration of Dremio and Prior Labs is proceeding according to plan. For now, the market is betting that Klein's cultural revolution — and the productivity gains it promises — will ultimately outweigh the costs of getting there. The rally suggests investors are willing to pay for the story; the trimmed guidance is a reminder that execution is still very much a work in progress.
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