Oracle's $95 Billion Warning Sinks SAP, but Buyback and Cloud Backlog Offer a Lifeline
Published on 06/30/2026 at 08:31 | Redaktion boerse-global.de
SAP shares closed Monday at €136.22, a whisker above the yearly low of €130.80 touched on June 25. The stock has shed 47% over the past twelve months and is down more than 32% since the start of 2026. Yet the company’s own operating reports tell a strikingly different story — cloud revenue surged 27% in the first quarter to nearly €6 billion, and the cloud backlog hit a record €21.9 billion, up 25%. The disconnect is almost entirely external.
Oracle lit the fuse. Its quarterly results revealed capital expenditure plans of up to $95 billion for fiscal 2027, sending a shockwave through the European software sector. SAP lost roughly 4% in a single session, becoming the weakest component of the DAX. An Accenture revenue warning soon after deepened the sell-off. Investors fear that ballooning AI infrastructure costs will squeeze margins across the industry, even though SAP is far less exposed to physical data-centre spending than its US rival. Adding to the pressure, Federal Reserve Chair Kevin Warsh has flagged a bias toward further rate hikes rather than cuts; Goldman Sachs now expects no easing until 2027, a structural headwind for high-valuation growth stocks.
SAP’s management is fighting back with a €10 billion share buyback programme running through the end of 2027. Since January 2026, the company has repurchased 16.3 million shares at an average price of €161.16, spending approximately €2.6 billion. The first tranche is complete, and a second phase is now underway, with another €2.6 billion earmarked for the market by the end of July. That cash injection has provided some support, but the quiet period ahead of the July 23 half-year results prevents management from issuing any business-critical updates until then.
Should investors sell immediately? Or is it worth buying SAP?
The operational figures from the first quarter remain solid. Earnings per share rose to €1.66 from €1.52 a year earlier, and the cloud backlog — a key forward-looking metric — reached a new all-time high. The company is also repositioning for the next technology cycle. It plans to acquire data specialist Dremio in the third quarter of 2026, bolstering the foundation for future AI applications. In June, SAP launched new AI assistants that integrate more deeply into customers’ business processes.
Analysts are holding their ground despite the sell-off. Berenberg’s Nay Soe Naing calls the current valuation historically low in the sector and maintains a target of €215. Goldman Sachs cut its gross margin forecast for the second half of 2026 but kept its buy rating unchanged. UBS analyst Michael Briest expects margins to improve in the second quarter and sticks with a €205 price objective. The widespread optimism reflects a belief that SAP’s strategy — prioritising profit improvement in existing cloud services rather than pouring billions into new data centres — will pay off.
All eyes are now on July 23. Investors will scrutinise the cloud backlog and the cloud gross margin, the two metrics that reveal whether SAP’s AI strategy is converting commercial interest into actual profitability. A strong showing could mark the bottom; disappointment risks a fresh test of the yearly low. Complicating the outlook, the EU AI Act comes into force in August, imposing stricter compliance requirements on high-risk applications. Delays in product rollouts linked to regulation could blunt the very AI features that SAP is counting on as its primary sales driver.
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