SAP’s EU Settlement and Buyback Fail to Counter Margin Squeeze from AI Push
Published on 06/30/2026 at 03:32 | Redaktion boerse-global.de
SAP shares have clawed back slightly from a 52-week low of 130.80 euros, closing Monday at 136.10 euros before edging up to 137.26 euros in recent trading. Yet the relief is modest: the stock has shed roughly 32% since the start of 2026, and over the trailing twelve months the decline is close to 47%. The Software AG spinoff continues to trade well below its 200-day moving average of 182.90 euros, underscoring the depth of investor unease.
A September 2025 EU probe into alleged anticompetitive ERP maintenance contracts had cast a long shadow over the stock. SAP defused that threat in November by offering flexible licensing and improved third-party access, avoiding a fine that could have reached 10% of global annual revenue. Market observers welcomed the settlement as a meaningful risk reduction, but the share price has failed to sustain any rally on the back of it.
The bigger drag now is the cost of transformation. SAP is pouring capital into Kubernetes AI infrastructure and cloud scaling. In May, the company unveiled its “Autonomous Enterprise” vision, featuring more than 50 Joule assistants and over 200 specialised AI agents. New projects in human capital management will roll out 13 Joule assistants from June 2026, while procurement will add 11 — five going live in June and six more in September. Separately, management is pursuing inorganic growth: the Dremio acquisition is set to close in the third quarter of 2026, alongside a multi-year, billion-euro investment in Prior Labs to strengthen data?analytics capabilities. These moves are meant to secure competitive leadership, but they come at a steep price.
Should investors sell immediately? Or is it worth buying SAP?
Goldman Sachs now projects SAP’s gross margin for the second half of 2026 at 72.8%, down from a prior estimate above 73%. The revision reflects higher hardware costs for AI infrastructure and integration expenses from recent acquisitions. Despite the downgrade, Goldman maintains a buy rating. Jefferies analyst Charles Brennan struck a similarly cautious tone on Sunday, arguing that sector sentiment is “one?sidedly negative” — a condition that historically creates room for re?rating. Jefferies also retains a buy recommendation.
A massive share repurchase programme has done little to arrest the slide. SAP has bought back its own stock at an average price of roughly 161 euros per share, well above the current market level. The timing of those buybacks is now being questioned by analysts, especially with the company in a quiet period ahead of second?quarter earnings on 23 July. That report will be the next major test: investors want to see whether cloud revenue growth can offset the margin erosion and whether the AI initiatives are yet making a measurable contribution to profitability.
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