Investors in SAP are being forced to recalibrate their expectations on two fronts at once. The software giant is absorbing a direct hit from Oracle’s aggressive capital spending outlook even as it confronts a more prosaic — but equally damaging — credibility issue: a fresh security patch day that underscores the complexity of its AI ambitions. The stock tumbled 3.67% on Thursday to 142.66 euros, widening its year‑to‑date decline to nearly 30% and bringing the 52‑week low of 135.52 euros into dangerously close range.
The immediate trigger came from across the Atlantic. Oracle beat fourth‑quarter forecasts with revenue of $19.18 billion and adjusted earnings of $2.11 per share, but the market’s reaction was brutally cold. The company unveiled plans to invest up to $95 billion in data centers and AI infrastructure by 2027, partly funded by a $20 billion equity offering that would dilute existing shareholders. A simultaneous slowdown in Oracle’s SaaS business spooked investors further, and because SAP directly competes in the same cloud‑software arena, that anxiety spilled over into the German stock. The one‑day loss left SAP just 5.27% above its bottom of the past year.
Yet the Oracle scare is only half the story. SAP’s own operational reality is weighing just as heavily. The company recently completed a critical patch day, issuing security advisories for products including NetWeaver and Commerce Cloud. Customers are required to apply the fixes immediately. On the surface this is routine maintenance, but for a firm selling reliability in core enterprise systems, every vulnerability notice chips away at the trust that underpins its premium valuation. As SAP pushes its Business AI Platform — where autonomous agents access sensitive business processes and governance layers — the margin for error shrinks to zero. False access or sloppy system boundaries are simply not forgiven.
Should investors sell immediately? Or is it worth buying SAP?
The technical picture reflects that erosion of confidence. Before Thursday’s drop the stock had been struggling near the 50‑day moving average of 149.53 euros (now at 149.44 after the repricing). The distance to the 200‑day moving average of 188.11 euros has widened to over 21%. The relative strength index, which stood at 44.5 before the Oracle news, has now fallen to 40.1 — weak but not yet oversold. Implied volatility remains elevated at around 44%, an unusually high reading for a European heavyweight. The stock had managed a modest 4% recovery over the preceding 30 days, but that gain has been all but erased.
Macroeconomic headwinds are compounding the sector’s distress. Germany’s DIW research institute has halved its growth forecast for 2026 to just 0.5% and warned of a technical recession in the second and third quarters. Rivals Nemetschek and TeamViewer each shed more than 4% on the same day. Geopolitical tensions in the Middle East are adding to inflation fears, creating a double headwind for growth stocks. SAP’s valuation, however, is beginning to look cheap on a historical basis: the trailing P/E stands at 23.0x, well below the five‑year median of 33.7x. Analysts still see an average price target of around 207 euros, implying more than 45% upside from current levels.
That bull case rests entirely on whether cloud growth can remain resilient and whether SAP can convince the market that its AI vision is not just a promise but a controlled, secure delivery. For now, every security patch and every rival’s spending plan chips away at the narrative. The stock is trading on probation, and trust has become SAP’s most expensive currency.
Ad
SAP Stock: Buy or Sell?! New SAP Analysis from June 11 delivers the answer:
The latest SAP figures speak for themselves: Urgent action needed for SAP investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from June 11.
SAP: Buy or sell? Read more here...
