A week before releasing its half-year results, Europe’s largest software company is navigating one of its most turbulent stretches in months. SAP’s stock dropped 5.6% on July 15 after US rival IBM reported a disappointing quarter, sparking fears that corporate IT budgets could tilt toward AI hardware and away from traditional software licenses. The concern has weighed heavily on SAP, which now trades at €137.60, just 5.20% above its 52-week low of €130.80 set at the end of June. The stock has lost 32.49% since the start of the year and sits 48.08% below its level of twelve months ago.
The divergence among analyst opinions underscores the uncertainty. Bernstein reaffirmed its “Buy” rating on July 14 with a price target of €276 — nearly double the current price — while JPMorgan downgraded SAP to “Hold” earlier in 2026 with a target of €175. Those ratings come from different points in the market cycle, but together they reflect a deep split in how the Street views the company’s prospects. The immediate focus now turns to July 23, when SAP reports second-quarter and first-half results. The consensus among 17 analysts calls for earnings per share of €1.76, up from €1.46 a year earlier, and revenue of €9.85 billion. Since June 22 the company has been in a quiet period and will not comment on operations until the numbers are released.
Offering a potential counterweight to the sector rotation narrative is a new study SAP commissioned with Oxford Economics, published on July 15. It reveals that the average return on investment from AI projects among corporate customers has risen to 21% globally, up from 16% a year earlier. At the heart of the research is “agentic AI” — autonomous agents that complete tasks without human intervention — which the study projects could deliver a per-company ROI of up to $17.6 million within two years. SAP plans to embed such agents directly into customers’ core business processes, aiming to accelerate its cloud adoption story. Currently 69% of executives surveyed said they are satisfied with their AI ROI, while in Saudi Arabia 91% report that AI projects meet or exceed expectations.
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But the study also reveals significant hurdles. 83% of managers consider agentic AI’s potential high or transformative, yet only 3% feel fully prepared to implement it effectively. Only 12% of companies have robust AI governance structures in place. Data quality remains a major bottleneck: 73% of firms struggle with incomplete or poor data, and 79% have experienced delays or incorrect outputs that required rework. Meanwhile, cybersecurity risks persist — SAP’s latest patch day addressed 16 vulnerabilities, three of them critical, including a NetWeaver flaw with a CVSS score of up to 9.9. These governance and security gaps could slow enterprise adoption of SAP’s more than 50 specialized AI agents, tempering the growth upside the study suggests.
Away from the AI buzz, SAP has been quietly strengthening its strategic position. In early July the company closed its acquisition of data-lakehouse provider Dremio, bolstering the data foundation for AI applications. Nokia, Microsoft and SAP also announced a multi-year partnership to accelerate cloud- and AI-driven transformations. And in an ironic twist given the recent IBM-linked sell-off, SAP deepened its cooperation with IBM itself on July 2 to integrate AI innovations into the SAP Cloud ERP Private Edition. On the regulatory front, the European Commission closed its antitrust investigation into SAP on July 9, with the company agreeing to increase flexibility in maintenance contracts and support models for on-premise licenses. The company also raised €3.5 billion through a euro bond in May and paid a €2.50 dividend per share for fiscal 2025.
Technically, the stock remains under pressure. It trades 23.07% below its 200-day moving average of €177.27, with a near-term support level at the €130.80 trough. A break above the 50-day average of €145.06 would offer the first hint of stabilization, but only if next week’s results validate the high expectations embedded in the AI ROI narrative. The broader rollout of SAP’s “Agent Hub” will serve as a real-world litmus test of whether enterprise demand for autonomous software can overcome the data and governance barriers identified in the study. For now, the market is waiting to see whether July 23 brings relief or reinforces the rotation fears that have driven SAP’s stock to its lowest levels of the year.
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