The software giant’s shares have staged a remarkable recovery over the past month, yet the technical picture is now flashing warnings even as institutional money flows in and regulatory clouds dissipate.
BlackRock has quietly been adding to its SAP position with notable urgency. The US asset manager disclosed on August 14 that its voting rights in the company had risen to 6.75 percent, following an earlier notification on August 10 that it had crossed the 6.70 percent threshold as of August 5. The rapid double-up within days places the world’s largest asset manager firmly behind the stock at a moment when the shares are riding one of their strongest rallies in recent memory.
A Regulatory Reprieve and a Cloud Backlog Milestone
The catalyst for the recent surge has been twofold. Germany’s Federal Cartel Office concluded its preliminary review without launching formal abuse proceedings against SAP, a decision the company announced on its corporate news page on Thursday. That regulatory clearance removes a lingering overhang that had weighed on investor sentiment in recent weeks.
The second driver came from the company’s second-quarter results, published just over a week ago. SAP’s cloud order backlog — the most closely watched leading indicator for future revenue — climbed to €22.9 billion, representing a 26 percent increase on a currency-adjusted basis. Cloud revenue rose 24 percent to €6.3 billion, while total group revenue grew 9 percent. On an IFRS basis, operating profit advanced 8 percent in the quarter, or 7 percent on a non-IFRS basis.
The backlog figure, approaching €23 billion, underscores how far the customer base has shifted toward cloud subscriptions, with those commitments set to flow through the income statement over the coming quarters. Management also reiterated its strategic focus on the “Autonomous Enterprise” concept and the expansion of Business AI as core growth pillars.
Financing the AI Ambition
Alongside the operational numbers, SAP has been busy on the corporate development front. The company completed the acquisitions of Prior Labs and Dremio, both aimed at strengthening its data management and AI portfolio. To fund these ambitions, SAP placed a €3.5 billion Eurobond, broadening its financing base at a time when the integration of those AI acquisitions is expected to slightly dilute margins.
On Thursday, management narrowed its 2026 operating profit guidance to a range of €11.8 billion to €12.2 billion, explicitly flagging that the integration of Dremio and Prior Labs would have a modest margin-dilutive effect — a signal that growth takes precedence over profitability in the near term.
Should investors sell immediately? Or is it worth buying SAP?
Analyst Divergence Persists
The analyst community remains split on valuation. Goldman Sachs and Jefferies both rate the shares a buy, with price targets of €215 and €210 respectively, while the DZ Bank has a sell recommendation with a target of €120 and JPMorgan sits on the sidelines with a neutral stance. Those assessments date from August 9 and reflect the reaction to the quarterly figures rather than the subsequent regulatory development.
Goldman Sachs reiterated its buy recommendation on Friday, citing sustained momentum in the cloud business and disciplined capital returns. TD Cowen also confirmed its “Buy” rating in a research note the previous day. JPMorgan’s downgrade to “Neutral” from “Overweight” dates back to March, when the bank cited potential saturation in the cloud backlog and valuation concerns — a view that looks increasingly dated given the share price performance since, though the bank has not issued an updated assessment.
The Charts Tell a Different Story
The stock closed Friday at €186.70, up 43 percent over the past 30 days. Yet that blistering pace has pushed technical indicators into dangerous territory. The Relative Strength Index now stands at 75.0, firmly in overbought territory, and media reports point to bearish divergences forming on the chart — signals that the recovery trend may be losing momentum.
The shares remain 23 percent below their 52-week high of €242.00 set in October of last year, and despite the recent rebound, they are still down 11 percent year-to-date. The rally has recovered only part of the earlier losses.
Operational Headwinds and Ecosystem Moves
Beyond the market dynamics, SAP faces operational challenges. A critical security vulnerability in SAP Commerce Cloud, carrying the maximum CVSS severity score of 10.0, came to light on August 9, with the final patch scheduled for September 9. On the partner front, IT services firm PrimeS4 Technologies earned certification as a “SAP Supply Chain Expert” for logistics solutions in North America last week, and SAP is hosting a Connect Day for customer service in discrete manufacturing in Zurich on August 27.
The picture for investors is therefore two-sided. The fundamental narrative — cloud growth, regulatory clearance, and institutional accumulation — remains intact and appears to be winning over large shareholders like BlackRock. But after such a sharp run, the technical setup suggests the stock may need to catch its breath before the next leg higher.
Ad
SAP Stock: Buy or Sell?! New SAP Analysis from August 23 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 August 23.
SAP: Buy or sell? Read more here...
