The software giant is doing everything right on paper — snapping up AI specialists, securing classified government cloud clearance, and posting double-digit revenue growth. Yet the market is punishing SAP shares with a ruthlessness that has erased nearly half their value from last year’s peak. The disconnect between operational momentum and investor sentiment has rarely been starker.
Over the past few weeks, SAP has gone on an acquisition tear unmatched in its recent history. In May, it closed the purchase of data specialist Reltio. Simultaneously, it is absorbing German startup Prior Labs, a Freiburg-based developer of AI models designed for enhanced table comprehension, with more than EUR 1 billion flowing into the venture over the next four years. The third piece is Dremio, a data-lakehouse expert expected to be integrated in the third quarter. To fund this splurge, SAP issued a fresh EUR 3.5 billion Eurobond.
None of that aggressive spending has lifted the stock. On Thursday, the shares touched a fresh 52-week low of EUR 134.38, closing at EUR 135.76. That is a whisker above the new trough and a world away from the EUR 266 peak recorded in July 2025 — a 12-month decline of 45%. Since January 2026, the stock has fallen roughly a third. Friday’s triple witching event, when options and futures expire, threatens to amplify volatility as institutions roll or close positions.
The primary drag is external. Oracle sent shockwaves through the software sector by announcing a massive capital expenditure programme of USD 95 billion, spooking investors across the industry. Goldman Sachs subsequently trimmed its forecast for SAP’s gross margin in the second half of 2026, while UBS downgraded European IT stocks on signs of a broader cooling in cloud software demand. SAP has been swept into that downdraft, with the shares now trading roughly 27% below the 200-day moving average of EUR 186.
Should investors sell immediately? Or is it worth buying SAP?
Technical indicators suggest the selling may be overdone — the relative strength index sits at 35, a level that hints at emerging oversold conditions. But analysts caution that a trend reversal is not imminent. JPMorgan maintains a “neutral” rating on SAP with a price target of EUR 175, implying about 29% upside from current levels. The bank points to the company’s structurally strong cloud backlog, though it notes that the migration of on-premise customers to subscription models is proceeding more slowly than anticipated.
On the positive side, SAP’s base business continues to perform. First-quarter cloud revenue climbed 19%, operating profit rose 17%, and management is guiding for full-year cloud sales of around EUR 26 billion. The company also secured a coveted clearance from Germany’s Federal Office for Information Security in early June, allowing its cloud to handle classified government data up to the “restricted” level — a milestone that opens a lucrative public-sector market where SAP is currently the sole domestic provider.
Yet the market is demanding more concrete proof of monetisation. The next major checkpoint comes on 23 July, when SAP publishes its second-quarter report. Investors want to see whether the AI-powered tools and recent acquisitions are translating into real orders. If the evidence is insufficient, pressure on the shares is likely to persist. The immediate technical test is the EUR 134 support level; a break below that on a closing basis could trigger further selling towards EUR 130.
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