Geopolitical Shock and a €2.6B Buyback Put SAP at a Crossroads Ahead of Earnings
Published on 07/10/2026 at 11:44 | Redaktion boerse-global.de
The contrast could hardly be starker: while a sudden escalation in the Middle East sent SAP shares sliding more than 4% in a single session, the software giant’s management has been quietly using the weakness to buy back its own stock at depressed prices. At last check, the shares were changing hands at €138.16, a stone’s throw from the 52-week low of €130.80. The €2.6 billion buyback program, which runs through July 2026, is a vote of confidence from the C-suite — but the market has yet to share that optimism.
Wednesday’s turmoil followed reports of US strikes on Iranian targets that shattered a brief ceasefire, hammering risk appetite across European equity markets. The DAX tumbled roughly 2.2%, dragging heavily weighted constituents lower. SAP lost 4.1% that day, closing at €138.46, then slipped further to €138.44 on Thursday and edged down to €138.16 on Friday. The sell-off has pushed the stock nearly 48% below the 52-week peak of €265.75 set in July 2025 and 31.6% into the red since the start of the year. Over 12 months, the decline stands at a punishing 47.2%.
Technical indicators offer little comfort. The 50-day moving average sits at €145.71 and the 200-day average at €178.70, both well above the current price, confirming a downtrend across short and medium timeframes. The relative strength index of 45.4 suggests neither oversold conditions nor a clear recovery signal. The stock is only about 5.6% above its June low, a margin that leaves little room for error before a new 52-week trough emerges.
Should investors sell immediately? Or is it worth buying SAP?
Management’s response has been to accelerate the buyback program. The current tranche, authorizing repurchases of up to €2.6 billion, is designed to take advantage of the lower valuation. Each euro spent now buys more shares than it would have at higher levels, a signal the board considers the equity undervalued. Yet the ongoing decline indicates that macro fears — not corporate fundamentals — are driving the action.
At the same time, SAP has not paused its strategic investments. On July 6, it completed the acquisition of Dremio, a data analytics specialist whose “Open Data Lakehouse” platform aims to unify the data foundation for artificial intelligence. The technology is expected to let customers link SAP data with external sources without costly migrations, and to sharpen the capabilities of the Joule AI assistant embedded in the company’s core ERP systems.
All eyes now turn to July 23, when SAP releases second-quarter and first-half results. Analysts project revenue of roughly €9.85 billion, up 9% year over year, and earnings per share of €1.76, a 20% jump. But the market’s attention will be trained on the cloud backlog and margin trends. Management has imposed strict cost discipline to fund heavy cloud infrastructure spending; if the numbers show that discipline translating into better profitability, investor sentiment could begin to shift.
Until then, the geopolitical risk remains the dominant driver. As long as tensions in the Middle East persist, European technology stocks will face headwinds. The crucial line in the sand is €130.80. A break below that level would mark a new 52-week low and deepen the technical damage. For now, the buyback and the Dremio deal are bets on the future — but it is the earnings report that will determine whether the market finally shares that conviction.
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