SAP’s Cloud Backlog Accelerates, but Acquisition Costs Force a Guidance Trim
Published on 07/25/2026 at 06:51 | Redaktion boerse-global.de
SAP shares staged their biggest single-day rally in months on Friday, jumping 9.15% to close at €140.80, even as the software giant trimmed its profit forecast for the year. The sharp reversal came just a day after the stock touched a new 2026 low, leaving the shares down roughly 32% year-to-date despite the bounce.
The catalyst was a single metric that has become the most closely watched figure in SAP’s quarterly reports: the current cloud backlog. That order book grew 27% in the second quarter to €22.92 billion, accelerating from the pace seen at the start of the year. On a currency-adjusted basis, the increase was 26%. The backlog represents contracts already signed but not yet recognized as revenue, giving investors a forward-looking gauge of demand that many analysts consider more telling than the reported earnings themselves.
Jefferies analyst Charles Brennan called the backlog figure a clear rebuttal to the skepticism that had built up around the stock in recent weeks. The data, he argued, shows that enterprise customers are not pulling back on cloud commitments, despite broader macroeconomic uncertainty. The positive read-through rippled across the software sector, suggesting the relief was not confined to SAP alone.
The cloud business itself delivered €6.28 billion in revenue during the quarter, up 24% from a year earlier. Within that, SAP’s flagship cloud ERP suite grew 27% to €5.53 billion. The company reaffirmed its full-year cloud revenue target of between €25.8 billion and €26.2 billion.
Should investors sell immediately? Or is it worth buying SAP?
CEO Christian Klein added that more than 90% of SAP’s top deals now include artificial intelligence components, underscoring the company’s push toward what it calls the “autonomous enterprise.” To keep AI-related costs from spiraling, CFO Dominik Asam has introduced an internal budgeting system that caps monthly AI-token spending per employee at between €100 and €5,000, depending on role. The move signals that management is trying to balance heavy investment in AI with margin discipline.
Yet the profit picture is more complicated. SAP lowered its 2026 guidance for adjusted earnings before interest and taxes, now expecting growth of 13% to 17%, down from the previous range of 14% to 18%. In absolute terms, the company sees adjusted EBIT of €11.8 billion to €12.2 billion. The downgrade stems from the July acquisitions of Dremio and Prior Labs, both of which Asam said will generate losses in the second half of the year.
Operating profit for the second quarter rose just 7% to €2.74 billion, missing some analyst expectations. Meanwhile, the legacy software license business continued its structural decline, with revenue plunging 32% to €131 million. That ongoing transition from upfront license fees to recurring cloud subscriptions creates near-term earnings pressure even as the long-term revenue base becomes more predictable.
SAP at a turning point? This analysis reveals what investors need to know now.
The stock now sits just below its 50-day moving average of €144.01, a level that technicians will watch closely in the coming sessions. A sustained break above that mark would be the strongest signal yet that the medium-term downtrend is losing force. The 100-day average at €147.73 represents the next upside target. On the downside, the 200-day moving average of €173.78 remains nearly 19% above the current price, a reminder of how far the stock has fallen from its highs.
Analyst opinions remain divided. Barclays has a price target of $255, while TD Cowen sees the stock at $210 — both implying significant upside from current levels. But the margin story will be the deciding factor. If the integration of Dremio and Prior Labs proves more costly than expected, or if cloud growth continues to decelerate from the pace seen in prior quarters, Friday’s rally could prove short-lived. The next real test will come when SAP reports third-quarter results and updates investors on whether the cloud backlog is converting into revenue at the expected rate.
Ad
SAP Stock: New Analysis - 25 July
Fresh SAP information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
