SAP’s Cloud Backlog Accelerates Again, but Acquisition Costs Clip the 2026 Outlook
Published on 07/24/2026 at 15:41 | Redaktion boerse-global.de
The German software giant’s stock staged a sharp reversal on Friday, climbing 4.93 percent to €135.88 after touching a fresh 52-week low of €127.52 just a day earlier. The bounce came on the heels of quarterly results that showed the company’s cloud engine is firing on more cylinders than many had feared — even as the cost of two recent acquisitions forced a modest trim to the 2026 profit forecast.
The metric that matters most is picking up speed
SAP’s current cloud backlog — the contracted revenue pipeline for the next twelve months — rose to €22.93 billion, representing currency-adjusted growth of 26 percent year over year. That acceleration is the headline number that caught analysts’ attention, coming after two consecutive quarters of deceleration in the backlog growth rate.
The cloud revenue itself climbed 24 percent on a currency-adjusted basis to €6.28 billion, with the cloud ERP suite growing even faster at 27 percent to €5.53 billion. That suite now accounts for roughly 88 percent of total cloud sales, underscoring how deeply the company’s core enterprise resource planning business has shifted to the subscription model.
Chief Executive Christian Klein pointed to the company’s “Autonomous Enterprise” strategy as the demand driver, with the Business AI platform and the new Autonomous Suite playing central roles. In the second quarter, the Joule AI assistant received new developer features and expanded agent capabilities. Klein’s message is clear: artificial intelligence isn’t a bolt-on feature at SAP — it’s being embedded directly into financial, supply chain and HR processes.
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Two acquisitions, one profit warning — sort of
The strong cloud numbers came with a footnote. SAP trimmed its 2026 operating profit guidance to a range of €11.8 billion to €12.2 billion, down from the previous €11.9 billion to €12.3 billion. Chief Financial Officer Dominik Asam attributed the roughly €100 million reduction entirely to the July acquisitions of Dremio and Prior Labs, two data-platform deals designed to bolster the company’s AI data strategy.
The cloud revenue and free cash flow targets remain unchanged. For 2026, SAP still expects cloud revenue between €25.8 billion and €26.2 billion. The license revenue line, meanwhile, continues its structural decline, dropping 32 percent to €131 million — an expected consequence of the cloud transformation that has been underway for years.
KeyBanc recently reaffirmed its buy rating on the stock with a €235 price target, noting that with a price-to-earnings ratio of roughly 19 for 2026, SAP’s valuation looks reasonable even with the acquisition-related drag.
Technical picture: leaving oversold territory, but still deep in the red
The stock’s relative strength index has climbed to 46.6, pulling out of oversold territory after weeks of selling pressure. But the distance to the 52-week high of €254.15 remains a staggering 46 percent, and the year-to-date decline still stands at 34.78 percent. On a seven-day view, SAP is down 1.60 percent, a reminder that Friday’s rally is more of a relief bounce than a trend reversal.
SAP at a turning point? This analysis reveals what investors need to know now.
Market observers see the quarterly figures as evidence that the cloud transformation is advancing despite a volatile macroeconomic environment. The predictable, recurring cloud revenue stream supports long-term margin expansion even as the legacy license business continues to shrink. Whether SAP can sustain the accelerating backlog growth through the second half of the year will be a key factor in determining whether the 2027 targets remain within reach.
The broader tech sector saw a similar pattern on Friday, with Oracle jumping 2.73 percent on the back of a Pentagon contract worth up to $7 billion, while Adobe and Atlassian also posted modest gains despite lingering security concerns. But for SAP, the story is more specific: the cloud backlog is growing again at a faster clip, and the question now is whether that momentum can hold long enough to offset the near-term earnings dilution from the two data bets the company just placed.
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