SAP shares hit a fresh 52-week low on Monday, sliding to €130.62 before recovering slightly to €131.28 — a decline of roughly 2% on the day. The stock has now surrendered more than half its value since touching a July high of €266.00, leaving year-to-date losses at 35%. The selloff comes despite a string of solid operational achievements that have done little to arrest the downward momentum.
The software giant’s first-quarter 2026 numbers were robust by any measure. Cloud revenue expanded 27%, total revenue reached €9.6 billion, and operating profit climbed 24% to €2.9 billion. The cloud backlog — a key forward-looking metric — rose to €21.9 billion on a currency-adjusted basis. Meanwhile, Berenberg analyst Nay Soe Naing reiterated a buy rating with a €215 price target, arguing that software sector valuations are “historically low” and that SAP’s fundamental story remains intact.
A standout project win in Japan underscores the company’s execution capability. In just three months, SAP and Accenture deployed a new financial platform for INFRONEER Holdings, a Japanese infrastructure services firm. Running on SAP Cloud ERP, the system is designed to become the group’s digital core, with plans to later incorporate AI-driven analytics and expand into procurement and cost management. Yet the market shrugged off the achievement.
The real drag on sentiment comes from outside Walldorf. Oracle jolted the sector by announcing capital expenditure of up to $95 billion for fiscal 2027, far exceeding Wall Street expectations. The move signals rising infrastructure costs across the industry, prompting Goldman Sachs to cut its gross margin forecast for SAP, citing higher hardware expenses in the second half of 2026. UBS followed by downgrading European IT stocks. Compounding the pain, Accenture slashed its revenue guidance as clients delay large IT spending decisions, and its own shares cratered as much as 20%. Since Accenture implements many SAP systems, analysts view the warning as a bellwether for the broader software market.
Should investors sell immediately? Or is it worth buying SAP?
SAP’s AI strategy, while ambitious, has yet to translate into a clear revenue driver. The company plans to roll out 13 new Joule assistants for human resources from June 2026, and at its Sapphire conference outlined over 200 specialised AI agents targeting finance, procurement, and supply chains — with the ultimate goal of enabling a fully autonomous enterprise. The catch: RISE customers get three assistants free for the first year, and full functionality requires costly premium contracts. Investors see the lack of a direct monetisation lever as a critical weakness.
Technically, the picture is bleak. The stock currently trades more than 28% below its 200-day moving average, and there is no chart support in sight until the recent low is defended convincingly. A stabilisation would require the share price to hold above €130.62 on a sustained basis.
All eyes now turn to SAP’s half-year report, due on 23 July 2026. Analysts will scrutinise the cloud backlog and the trajectory of cloud gross margins — two metrics that will reveal whether the AI push is starting to generate commercial traction. If those numbers disappoint, the stock may struggle to find a floor.
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