SAP Bets on Tabular AI to Revive Cloud Momentum as Q2 Results Approach
Published on 07/20/2026 at 09:11 | Redaktion boerse-global.de
SAP’s stock is treading water near its 52-week low as a cluster of events — a billion-euro artificial intelligence acquisition, the closure of a long-running European Union antitrust probe, and an active share buyback — converge ahead of the company’s second-quarter earnings release on July 23. The shares closed Friday at €138.50, down 1.81% on the day, leaving them just 5.89% above the 12-month trough of €130.80 and a staggering 33.53% below where they started the year. The immediate drag came from IBM’s profit warning, which cast a pall over the entire software sector and reinforced lingering doubts about the pace of AI monetization in enterprise technology.
A Targeted Acquisition for a Specific Data Challenge
The Walldorf-based group moved swiftly to shore up its AI credentials, announcing the acquisition of Freiburg startup Prior Labs. Founded last year, Prior Labs specializes in tabular foundation models — AI systems trained specifically on the spreadsheet-like data structures that form the backbone of SAP’s ERP software. SAP plans to invest more than €1 billion over four years to integrate the technology. The deal provoked a muted reaction on Friday, but the subdued share price also reflected broader sector headwinds: IBM’s outlook underscored the difficulty of turning AI investments into near-term profit, a theme now weighing on cloud providers and chipmakers alike.
EU Reprieve and Capital Returns Provide Limited Support
A bright spot came on July 9, when the European Commission dropped its cartel investigation into SAP, removing a regulatory overhang that had added to investor unease. The company has also been returning capital to shareholders through a buyback program of up to €2.6 billion, set to run until July 31. Those measures, however, have done little to reverse the stock’s slide. The shares now trade roughly 21% below their 200-day moving average, a technical signal that the medium-term downtrend remains intact. A technical forecast warns of a possible further decline into a range of €112 to €138 over the next four weeks if the weakness persists.
Should investors sell immediately? Or is it worth buying SAP?
Cloud Growth at the Center of the Q2 Narrative
Analysts expect SAP to report cloud revenue growth of around 22% for the second quarter. That figure has become the key metric for investors trying to gauge whether the company’s core business is gaining momentum despite the tough market environment. The stock recently slipped below its 50-day moving average of €144.72, and a solid set of numbers could help it reclaim that level. Yet much depends on whether SAP can simultaneously reassure the market that its profitability targets remain achievable after the costly Prior Labs commitment. Morningstar assigns a fair value of €265 and a three-star rating, suggesting the shares are fairly valued rather than deeply discounted — a cautionary note that tempers the apparent upside from current prices.
Structural Tailwinds Beyond the Headlines
Longer-term, the environment for European software providers appears to be improving. A survey by Myra Security and Civey found that 90% of German IT decision-makers now demand European digital products for government and critical infrastructure, up sharply from a year ago. Nearly 40% of German companies are already rolling out EU-based solutions, compared with roughly 20% in the previous year. While such shifts do not translate into immediate stock gains, they could provide a steady demand base for homegrown players like SAP as digital sovereignty becomes a policy priority.
What Comes Next
The immediate test for the stock is the Q2 report, where the market will weigh the cloud growth trajectory against the cost of the AI push and the lingering sector-wide uncertainty. A bonus certificate with barrier at €110 — offering an annualized return of 34.7% through June 2027 — reflects the belief of some structured product issuers that the stock will not fall much further. Whether the earnings release can provide the catalyst to lift SAP off its lows, or merely confirms the pressure, will be clear after the closing bell on July 23.
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