SAP’s Stock Hovers at a Crossroads as Q2 Earnings Put AI Strategy to the Test
Published on 07/23/2026 at 11:01 | Redaktion boerse-global.de
SAP shares edged higher in pre-market trading on Thursday, rising 1.04 percent to €132.14, as investors braced for the software giant’s second-quarter and first-half earnings release scheduled for 10:05 p.m. CET. The modest uptick offers little comfort, however, with the stock sitting just a few euros above its 52-week low of €129.70 — a level it touched only this week. Since the start of the year, the shares have shed 36.59 percent, while the 12-month decline stands at a staggering 46.88 percent.
The earnings report arrives at a moment of acute tension for the Walldorf-based company. Analysts expect total revenue of €9.85 billion and adjusted earnings per share of €1.75, with cloud revenue — the key growth engine — forecast to rise roughly 22 percent to €6.26 billion. But the market’s focus will extend well beyond the headline numbers. The critical question is whether SAP can demonstrate that its aggressive push into artificial intelligence is beginning to generate measurable returns in the cloud business.
A Billion-Euro AI Bet Under Scrutiny
SAP has been on an acquisition spree to bolster its AI capabilities. On July 17, it completed the takeover of Prior Labs, a Freiburg-based AI specialist, and has committed to investing more than €1 billion over four years to transform the unit into a frontier AI laboratory for structured data. Earlier this month, the company finalized the acquisition of Dremio, a data lakehouse platform designed to enhance so-called agentic AI by integrating third-party data. Those deals follow last year’s purchase of WalkMe, a digital adoption platform, for an equity value of roughly $1.5 billion.
The spending spree was financed in part by a €3.5 billion euro-denominated bond placement in late May, earmarked for refinancing and general corporate purposes. Yet the strategy carries risk. Investors are worried that AI-driven automation could cannibalize traditional software license revenue — a scenario some market participants have dubbed the “SaaS apocalypse.” The earnings call will be closely watched for signs that the Prior Labs and Dremio acquisitions are already translating into new cloud bookings.
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Technical and Fundamental Pressures Mount
The stock’s technical condition underscores the depth of market skepticism. The relative strength index sits at 39.9, approaching oversold territory, which some chartists see as a potential setup for a bottom. But the broader picture remains bleak: the shares trade 8.34 percent below their 50-day moving average and more than 24 percent beneath the 200-day average. The gap to the 52-week high, set in summer 2025, is roughly 50 percent.
Fundamental headwinds are also building. IBM recently lowered its own profit forecast, and reports of IT budgets shifting toward hardware have weighed on software stocks more broadly. Geopolitical tensions in the Middle East threaten to delay capital spending in the manufacturing sector, a key customer base for SAP. If the company revises its cloud outlook downward due to lengthening sales cycles, the €129.70 support level could give way, opening the door to further losses.
Regulatory Relief and Board Changes
Not all news has been negative. In early July, the European Commission closed its antitrust investigation into SAP’s maintenance and support policies for on-premise solutions, sparing the company a potential fine. In exchange, SAP agreed to a ten-year commitment to make it easier for customers to switch between maintenance models.
There have also been notable changes in the boardroom. At the annual general meeting in May, former Deutsche Telekom CEO René Obermann was elected to the supervisory board with over 99 percent approval. Pekka Ala-Pietilä assumed the chairmanship, succeeding co-founder Hasso Plattner. Separately, Udo Tschira, a member of the founding family, disclosed that he now holds 4.19 percent of voting rights following new voting pacts within the family, crossing the 3 percent threshold.
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What to Watch Tonight
The earnings release will be followed by an analyst conference at 11:00 p.m. CET. Key areas of focus include cloud order growth, which the consensus sees in the 22 to 24 percent range, and the trajectory of the operating margin, which SAP aims to support through cost controls on hiring and travel. Investors will also be listening for any update on the company’s share buyback program, which has a volume of up to €2.6 billion and runs through July 31, 2026.
UBS reiterated its “Buy” rating on the stock in mid-July, and Morningstar maintains a fair value estimate of €265 — more than double the current price. But the near-term direction hinges entirely on tonight’s numbers. A close above €129.70 would keep the door open to stabilization; a decisive break below that level would likely shift attention to deeper technical supports. For now, SAP’s stock is balanced on a knife’s edge, waiting for evidence that its billion-euro AI bet is starting to pay off.
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