Investors in SAP are currently weighing a confluence of significant developments: freshly released annual results, the costly resolution of a long-running legal dispute, and a shifting sentiment within the broader software sector. This mix paints a relatively clear picture of both opportunity and expense, offering context for the stock’s recent attempt to stabilize following a period of weakness.
Sector Sentiment and Technical Positioning
The enterprise software landscape has recently provided some tailwinds. Positive earnings from U.S. peer Salesforce helped alleviate near-term fears of “AI disruption” across the industry, suggesting that artificial intelligence products are gaining commercial traction. This environment is favorable for SAP as it pushes its own AI initiatives.
Nevertheless, the equity’s technical chart tells a story of recent pressure. Over a 30-day period, the share price has declined by 12.21%, contributing to a year-to-date loss of 14.14%. Closing at €173.44 on Thursday, the stock trades notably below its 50-day moving average of €189.08, indicating the medium-term downward trend remains intact. However, with the current price sitting just roughly 4% above its 52-week low of €166.66, the market appears to be searching for a solid foundation.
Annual Results Confirm Cloud Momentum
SAP has presented its audited financial and sustainability data for 2025 through its Integrated Report and U.S. annual filing (Form 20-F). The company reported revenue of €36.8 billion, an increase of 8%. Net profit reached €7.5 billion, though this doubling was partly due to a base effect, as the prior year (2024) was burdened by restructuring provisions related to job cuts.
The forward-looking narrative remains centered on cloud performance. Cloud revenue advanced by 26% in 2025 to €21.02 billion, with cloud ERP suite revenue climbing an even stronger 32% to €18.12 billion. A key stability metric also improved: the share of predictable revenue from subscriptions and support now constitutes 86% of total sales, a factor typically valued more highly during uncertain economic periods.
Should investors sell immediately? Or is it worth buying SAP?
For the 2026 fiscal year, management reaffirmed its cloud revenue outlook of €25.8 to €26.2 billion. Drivers cited include Business AI and the SAP Business Data Cloud. This sets up a critical question for coming quarters: will AI function as a broad-based growth accelerator, or will its impact remain largely anticipatory for now?
A $480 Million Legal Resolution
A separate, substantial financial charge stems from the settlement of all pending litigation with Teradata since 2018. SAP will pay a gross amount of $480 million to resolve the claims, which included allegations of misappropriated trade secrets and anti-competitive bundling practices. The settlement became effective on February 19.
For SAP, the primary benefit is the elimination of a years-long legal overhang. What was once a difficult-to-quantify litigation risk has been transformed into a known, fixed cost, enhancing predictability for investors despite the significant sum involved.
All eyes now turn to the next major catalyst on the calendar: SAP’s upcoming quarterly report, scheduled for April 23, 2026. This release will reveal whether robust cloud growth and the confirmed outlook can overshadow the one-time settlement charge and whether the stock has built sufficient momentum to challenge its key moving averages.
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