SAP Nears a Year Low as Q2 Earnings Put the Cloud and AI Story to the Test
Published on 07/23/2026 at 18:13 | Redaktion boerse-global.de
SAP shares are treading dangerously close to their 52-week floor just hours before the software giant is set to release its second-quarter results, leaving investors to weigh whether the stock’s brutal slide has created a buying opportunity or signals further pain ahead.
The stock closed at €127.78 on Thursday, having touched a fresh 52-week low of €127.52 during the session — a decline of 2.29% on the day. That puts the shares roughly 50% below the 52-week high of €254.15 and leaves them down about 38.67% since the start of the year. The numbers are due after the US market close at 22:05 MESZ, followed by an analyst call at 23:00.
The Cloud Growth Question
All eyes are on the cloud business, the company’s primary growth engine. SAP had guided for currency-adjusted cloud growth of 23% to 25% for the full year 2026, after posting 27% growth in the first quarter. The analyst consensus for Q2 now stands at roughly 22%, with cloud revenue expected to hit €6.26 billion. Total revenue is seen at €9.85 billion, with an adjusted earnings per share of €1.75.
The market is bracing for a potential deceleration. Rising energy costs and geopolitical tensions in the Middle East are weighing on IT budgets among industrial clients, and there are fears that customers may delay software spending in favor of hardware upgrades driven by global storage shortages and high infrastructure costs. The key question is whether SAP’s push to monetize artificial intelligence can offset any softness in the core cloud business — or whether the company will be forced to lower its full-year guidance.
Should investors sell immediately? Or is it worth buying SAP?
A Billion-Euro AI Bet
SAP has been aggressively building out its AI capabilities. In early July, it closed the acquisition of data-lakehouse platform Dremio, which is expected to bolster its so-called agentic AI capabilities by integrating third-party data. That was followed in mid-July by the purchase of Freiburg-based AI startup Prior Labs. SAP plans to invest more than €1 billion over four years to turn Prior Labs into a frontier AI lab focused on structured data, using new tabular foundation models to differentiate itself from pure-play language model providers.
These deals follow the 2024 acquisition of WalkMe, a digital-adoption platform, for an equity value of roughly $1.5 billion. To help fund the shopping spree, SAP placed a €3.5 billion euro bond in late May for refinancing and general corporate purposes.
Technical Picture Deteriorates
The stock’s technical condition has worsened considerably. The 50-day moving average sits at €144.08 — 11.31% above the current price — while the 200-day moving average of €174.23 is a full 26.66% higher. The 14-day relative strength index stands at 34.5, approaching oversold territory, which could set the stage for a technical bounce if the earnings report provides a catalyst.
A sustained break below the €127.52 support level would be a bearish signal, potentially opening the door to deeper losses. On the upside, a solid cloud order backlog and confirmation of the full-year free cash flow target of roughly €10 billion could help restore confidence.
Regulatory and Governance Developments
On the regulatory front, the European Commission closed its antitrust probe into SAP’s maintenance and support policies for on-premise solutions in early July. The company avoided a fine but committed to a ten-year pledge to make it easier for customers to switch between maintenance models.
There have also been changes in the boardroom. The annual general meeting in early May elected former Deutsche Telekom CEO René Obermann to the supervisory board with over 99% approval, while Pekka Ala-Pietilä took over as chairman, replacing Hasso Plattner. Separately, Udo Tschira from the founding family recently crossed the 3% voting rights threshold, now holding 4.19% of SAP SE’s voting rights through new voting agreements within the family.
Insider Buying at Higher Levels
Insider activity offers a glimpse of how management viewed the stock at higher prices. In late January, CFO Dominik Asam bought shares worth around €1.0 million at €169.20 each, while board member Sebastian Steinhäuser purchased €349,486 worth at €174.00. Both prices are well above current levels, suggesting management saw value at those points.
SAP at a turning point? This analysis reveals what investors need to know now.
UBS reiterated its “Buy” rating on SAP in mid-July, even as the stock has lost 36.58% year-to-date and 46.87% over the past 12 months.
What Comes Next
The immediate direction will likely be determined in after-hours trading and during the analyst call late Thursday. If SAP can hold the line on cloud growth guidance and demonstrate that its AI investments are gaining traction, the stock may find a floor near current levels. A cut to the cloud forecast below 23%, however, could trigger another wave of selling.
The next catalyst will come on Friday, when analysts publish their revised price targets and commentary on the company’s AI monetization strategy. For now, SAP’s stock is sitting at a crossroads — and the earnings report will decide which path it takes.
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