SAP's Half-Year Report: A Test of Whether Cloud Growth Can Pull the Stock Out of Its 42% Tailspin
26.05.2026 - 19:02:59 | boerse-global.de
SAP’s cloud business is humming along nicely, yet its shares have been mauled. The software giant reported a 20% jump in its current cloud backlog to €21.9 billion in the first quarter, with currency-adjusted growth hitting 25%. Cloud revenue rose 27% on the same basis, and the cloud ERP suite accelerated by 30%. But none of that has been enough to stop the stock from shedding 42.37% of its value over the past twelve months — or to prevent a year-to-date slide of 25.03%.
The disconnect is sharp. On Tuesday, SAP shares closed at €151.44, down 1.88% from the previous session’s €154.34. The stock has clawed back roughly 12% from its 52-week low of €137.62 hit in mid-May, but that recovery has already pushed the relative strength index to 88.2 — well into overbought territory. Short-term momentum is hot, but the long-term picture remains grim: the 200-day moving average sits at €192.59, a full 21.36% above the current price.
Strong Q1, but the tape has its own story
The first-quarter numbers released on April 23 were solid enough. Revenue reached €9.6 billion, while operating profit climbed 24% on a currency-adjusted non-IFRS basis to €2.9 billion. The cloud backlog — a key forward-looking metric — swelled to €21.9 billion. Yet the market has taken a skeptical view, suggesting that even strong operational performance is being discounted by valuation concerns and profit-taking.
Should investors sell immediately? Or is it worth buying SAP?
Part of the caution stems from guidance conditions. For the full year 2026, SAP expects cloud revenue of between €25.8 billion and €26.2 billion, with non-IFRS operating profit in a range of €11.9 billion to €12.3 billion. But those targets are contingent on a de-escalation in the Middle East and the completion of the Reltio acquisition. More immediately, management has warned that the second quarter will see a hangover from special effects that inflated cloud growth in Q1 — a headwind that could stall the narrative just as the stock tries to find its footing.
A three-pronged AI bet
SAP has been busy reshaping its strategy around artificial intelligence, announcing three acquisitions in May alone. The first, Reltio, is a master data management specialist that helps unify corporate data from both SAP and non-SAP systems for AI workloads — the deal has already closed. Next is Dremio, a data lakehouse platform aimed at accelerating agentic AI and bolstering the SAP Business Data Cloud; that transaction is expected to close in the third quarter, subject to regulatory nods. The third piece is Prior Labs, developer of tabular foundation models designed to handle structured business data — tables, statistics, numbers — where large language models often stumble. SAP plans to invest more than €1 billion in Prior Labs over the next four years.
These moves underline the company’s push to embed AI into its core enterprise offering. But while the strategy is ambitious, it has not yet translated into investor conviction. The stock remains roughly 20% below its 200-day average, and the derivative market reflects a wait-and-see attitude. One bonus certificate on SAP, with a barrier at €100 and a bonus/cap at €180 maturing in September 2027, signals that structured product issuers are pricing in sideways action rather than a rapid trend reversal.
The July 23 litmus test
All eyes are now on the half-year report scheduled for July 23, due out at 22:05 Central European Time, with an analyst conference an hour later. That release will be the first real test of whether the Q2 headwinds are as severe as feared — and whether the cloud story can still command a premium valuation. The stock’s nearest support lies at the 52-week low of €137.62, while the 50-day moving average at €149 offers a near-term floor. Holding above those levels would keep the post-May recovery alive, but fresh buying conviction needs more than just robust cloud rhetoric. The backlog, cloud ERP momentum, and business AI traction must all be backed up with hard numbers for the market to believe the recovery has legs.
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