SAP Nears Q2 Report with €1B AI Bet, EU Settlement, and a Stock That Has Halved from Its Peak
Published on 07/19/2026 at 13:02 | Redaktion boerse-global.de
Shares of SAP have lost more than half their value since hitting an all-time high of roughly €284 in February 2025, closing last Friday at €138.50 — a stinging 33.53% year-to-date decline that puts the stock just 5.89% above its 52-week low of €130.80 reached in late June. All eyes are now on July 23, when the software giant will release its second-quarter and first-half 2026 results, a moment that could either validate its costly AI pivot or deepen the sell-off.
The cloud business is expected to be the headline metric. Analysts project cloud revenue growth of around 22% in Q2, following a first quarter where cloud sales rose 27% on a currency-adjusted basis and total revenue climbed 12%. Group EBIT jumped 24% in Q1, with margins above 30%. The current price-to-earnings ratio of 22 is the cheapest the stock has been in a decade, according to market observers, though the market is clearly demanding proof that the AI narrative is translating into hard numbers.
SAP has not been idle on the spending front. On July 17 it closed the acquisition of Vienna-based AI startup Prior Labs for more than €1 billion, with over $500 million in cash disbursed over four years. Prior Labs, founded in 2024, specializes in TabPFN technology for processing structured data and will continue to operate as a standalone unit. The deal follows the July 6 takeover of Dremio, a data-lakehouse platform provider, as SAP builds the data architecture to support agentic AI applications. To offset the investment outlay, management imposed a strict cost-discipline program effective July 1, curbing non-essential business travel and tightening hiring.
Should investors sell immediately? Or is it worth buying SAP?
Regulatory clouds cleared earlier this month. The European Commission closed its antitrust probe into SAP’s maintenance and support policies — opened in September 2025 — without imposing a fine, after SAP agreed to a ten-year commitment to waive reactivation fees on on-premise systems. The German-speaking SAP user group DSAG welcomed the settlement, saying it gives customers more flexibility in choosing maintenance strategies.
The analyst community, however, remains deeply split on valuation. UBS analyst Michael Briest cut his price target from €205 to €164 on July 15, maintaining a "Buy" rating but warning that monetizing the new AI agent strategy is progressing more slowly than expected within complex ERP landscapes. Bernstein reaffirmed a "Buy" with a €276 target on July 16, while Morningstar’s Rob Hales stuck with a €265 fair-value estimate and a "Buy" rating on July 17, though he flagged macro risks to IT budgets from the Iran conflict and rising energy costs. JPMorgan took a more cautious stance on the same day, upholding a "Neutral" rating and a €175 target. The range — from €164 to €276 — underscores the uncertainty about how quickly SAP can turn AI into revenue.
Technical analysts warn that if the downtrend persists, the stock could slide into the €112–€138 range within four weeks. Morningstar’s fundamental view, by contrast, sees upside from current levels. The divergence captures the market’s mood four trading days before the quarterly release.
For investors, the key questions are straightforward: Can cloud growth meet the 22% consensus? Will margins hold up after a strong Q1? And will the integration of Prior Labs and Dremio weigh on profitability before the AI payoff materializes? The July 23 earnings call and analyst conference at 23:00 MESZ will provide the first concrete answers.
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