SAP's Cloud Momentum Draws Institutional Buying Even as Analysts Split on Valuation
Published on 08/25/2026 at 05:21 | Redaktion boerse-global.de
The Walldorf software group finds itself at an unusual crossroads: its cloud business is compounding at a pace that has drawn fresh capital from some of America's largest asset managers, yet the analyst community remains visibly divided over how much further the shares can travel.
That tension was on display again this week. Morgan Stanley lifted its price target on SAP from €190 to €215, citing sustained momentum in the company's cloud operations. The upgrade arrived just days after Berenberg trimmed its own target from €215 to €205 — while reaffirming a "Buy" rating — a reminder that the stock's recent surge has made valuation a live debate on the Street.
Big Money Moves In
Regulatory filings dated August 18 reveal a notable wave of accumulation among US institutional investors. BlackRock added roughly 96,400 shares to its SAP position, while Eagle Capital Management purchased around 792,000. The most aggressive buyer was Hotchkis & Wiley Capital Management, which expanded its stake by approximately 2.3 million shares in a single move.
Such concentrated buying from institutional desks is typically read as a conviction signal — a bet that the company's transformation story still has room to run. The timing is telling: these purchases landed just weeks after SAP reported second-quarter results that underscored the strength of its pivot to subscription-based software.
The Cloud Engine Keeps Humming
Those numbers, published on July 23, form the bedrock of the bullish case. Currency-adjusted cloud revenue grew 24 percent, lifting segment sales to €6.28 billion. The cloud backlog — a forward-looking gauge of contracted future revenue — expanded 26 percent to €22.9 billion, while the cloud ERP suite grew 27 percent on a currency-neutral basis. Total group revenue rose 9 percent.
Should investors sell immediately? Or is it worth buying SAP?
The secondary article cites slightly different backlog growth of 27 percent, reflecting rounding differences in reporting periods, but the trajectory is unmistakable: enterprises continue to commit to SAP's cloud ecosystem at scale.
That momentum carried the share price roughly 44 percent off its 52-week low between July 23 and August 14, a rally substantial enough to lift the DAX given SAP's index weighting now exceeds 15 percent.
A Slightly Trimmed Outlook — With Good Reason
The earnings release came with a modest caveat. SAP nudged its 2026 non-IFRS operating profit guidance down from €11.9–12.3 billion to €11.8–12.2 billion, a haircut attributable to dilution from two recent acquisitions. Dremio, an open data-lakehouse platform provider, was folded in early July; Prior Labs, a Freiburg-based AI company, followed at the end of that month. Together, the two deals are expected to weigh on results by more than €100 million.
Even after the adjustment, the guidance range still implies 13–17 percent growth over last year's €10.42 billion baseline. For cloud revenue, SAP targets €25.8–26.2 billion on a currency-adjusted basis, representing 23–25 percent expansion. The Bundeskartellamt cleared both transactions during preliminary review, removing regulatory overhang before the deals closed.
Partnerships and Buybacks in Parallel
The strategic push extends beyond M&A. This week, SAP announced a partnership with NTT Data that embeds SuccessFactors and the Joule AI assistant into the Japanese IT services firm's "Global People and Culture Transformation" program — another step in SAP's effort to weave its AI tools deeper into the human-resources software used by large enterprises.
Meanwhile, the company continues to execute its share repurchase program. During the first week of August, SAP bought back roughly 2.9 million shares at an average price of €169.72, followed by an additional 50,000 shares the next week, purchased in daily tranches of 10,000 on Xetra. The program has now accumulated more than 5.1 million shares.
SAP at a turning point? This analysis reveals what investors need to know now.
Where the Stock Stands
The shares closed Monday at €186.98, essentially flat on the day, though the secondary source records a slightly higher close of €187.64 with a 0.5 percent gain from Friday's €186.70 — minor discrepancies reflecting different reporting timestamps. Over the past week, the stock added 2.7 percent, helped in part by aftereffects from the SAP Security Patch Day. The 30-day gain stands at roughly 24–33 percent depending on the measurement window, while the year-to-date picture remains negative at minus 11 percent.
At current levels, the stock still sits about 23 percent below its 52-week high of €242, reached last October. Analyst price targets currently span a wide range of €164 to €215, according to media reports, with sentiment running from bullish to neutral.
All eyes now turn to October 21, when SAP reports third-quarter results. The consensus calls for earnings per share of €1.83 on revenue of €10.09 billion. Until then, the tug-of-war between the bulls and the cautious on the Street is likely to define the tape.
Ad
SAP Stock: New Analysis - 25 August
Fresh SAP information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
