SAP's 2.6-Billion-Euro Buyback and Record Cloud Backlog Put the Spotlight Back on Margins
Published on 08/03/2026 at 12:10 | Redaktion boerse-global.de
The arithmetic of SAP's recovery is getting harder to ignore. On Monday, shares jumped 2.89 percent to 164.00 euros, extending a rebound that has now been building for weeks. The trigger: a record current cloud backlog of 22.9 billion euros, up 27 percent year over year, plus a fresh wave of strength from US hyperscalers Microsoft and Amazon, whose quarterly results reinforce the case for a durable global investment cycle in cloud infrastructure.
The rally marks a notable turn for a stock that spent much of 2026 in the red. Shares remain down 21.72 percent since the start of the year and 33.25 percent over the past twelve months, with the 52-week high of 257.70 euros — set last August — still 36.36 percent away. Yet the market's reaction to the July 23 earnings report suggests investors are now weighing the growth story more heavily than the near-term margin drag.
That report delivered a clear message: cloud revenue climbed 22 percent to 6.3 billion euros (24 percent on a currency-adjusted basis), total revenue rose 9 percent to 9.88 billion euros, and non-IFRS operating profit advanced 7 percent to 2.7 billion euros. The company also narrowed its full-year non-IFRS operating profit guidance to a range of 11.8 to 12.2 billion euros, down from the previous 11.9 to 12.3 billion euros. Reuters attributed the adjustment to dilution from the recently completed acquisitions of Dremio and Prior Labs — a mechanical explanation that tempers any reading of the guidance trim as a demand warning.
The Buyback Signal
Four days after the numbers landed, SAP launched the second tranche of its 2026 share repurchase program, worth up to 2.6 billion euros or roughly 18.5 million shares. The broader program runs through the end of 2027 with a ceiling of 10 billion euros, a structural source of demand that gradually tightens the free float. The move underscores management's willingness to return capital even while digesting acquisitions — a combination that has helped lift the stock 14.30 percent over the past 30 days, with Friday's close at 159.40 euros.
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Adding to the signal, CEO Christian Klein purchased company shares worth 325,219 euros on July 24. Insider buying of that sort is often read by investors as a vote of confidence in the strategy, though it rarely moves the tape on its own.
Analysts Split on the Margin Question
The central debate now hinges on a single metric: whether the cloud backlog — a measure of contracted future revenue — can translate into profitable growth. The 22.9 billion euro figure offers strong visibility into coming quarters, but the dilution from Dremio and Prior Labs raises the question of how quickly those acquisitions will contribute to the bottom line.
Jefferies reaffirmed its "Buy" rating on July 28 with a price target of 210 euros, citing robust momentum in cloud subscriptions. Goldman Sachs trimmed its target from 230 to 215 euros on July 27 while keeping a buy recommendation. Berenberg held at "Buy" with a 205 euro target on the same day, and Deutsche Bank saw potential with a 200 euro target on July 24. JPMorgan, by contrast, stayed at "Neutral" with a 175 euro target, signaling that the post-rally valuation is no longer universally supported.
The bear case has its advocates. The DZ Bank cut its target from 130 to 120 euros on July 24, maintaining a "Sell" rating on concerns over near-term margin pressure. Technical indicators also warrant caution: annualized volatility stands at 49.16 percent, and the RSI at 67 suggests the recovery is already fairly extended, leaving the stock vulnerable to a pullback if third-quarter margins disappoint.
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What Happens Next
The immediate technical picture has improved considerably. The stock now trades just 5.93 percent below its 200-day moving average, a marked improvement from earlier in the year when it sat well beneath that line. As long as the cloud backlog continues to grow at double-digit rates and buybacks provide structural support, the bullish case remains intact and could drive further convergence toward the 200-day level.
The next hard test comes on October 21, when SAP reports third-quarter results. By then, the Dremio acquisition is expected to close, giving investors a clearer view of whether the record backlog is indeed converting into profitable growth — or whether the dilution from recent deals will give the more skeptical voices, like the DZ Bank's, renewed weight.
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