SAP Prioritizes AI in Sweeping Cost Revamp as €2.6B Buyback and July Earnings Shape Market View
Published on 07/05/2026 at 10:34 | Redaktion boerse-global.de
The quiet period enveloping SAP is testing investors’ patience, but the software giant has not been idle behind closed doors. While management is barred from commenting until the half-year results land on 23 July, a series of aggressive cost-cutting measures has been set in motion internally. The company is halting non-essential travel, freezing recruitment outside artificial intelligence roles, and squeezing supplier spending — all part of a strategic pivot that subordinates every expense to the expansion of its AI capabilities.
An internal memo to staff obtained by journalists lays out the new pecking order. The board will only authorise hires that directly support core AI positions, which it deems critical to long-term success. Other departments will have to make do with existing headcount, and any internal travel not tied to AI projects has been scrapped entirely. The message is unmistakable: SAP is tightening its belt in areas that do not advance its machine-learning agenda.
The company has also deployed a financial safety net in the form of a share buyback program. Under the current tranche, SAP is authorised to repurchase up to €2.6 billion of its own shares by the end of July 2026. With the stock price under pressure, those buybacks are now being executed at significantly lower levels, effectively allowing the company to scoop up equity on the cheap. The program acts as a de facto support floor, absorbing some of the selling pressure that has battered the shares.
Should investors sell immediately? Or is it worth buying SAP?
At Friday’s close, SAP shares stood at €139.32, marking a year-to-date slide of roughly 31%. Technical analysts see a fragile picture. The 50-day moving average at exactly €146.45 represents an immediate ceiling, while the 200-day line sits far above near the €181 area. On the downside, a support zone around €135 is considered the first line of defence; if that gives way, the 52-week low of €130.80 comes into play. A definitive break above €147 would provide the first clear relief signal.
The cloud business remains the central narrative for the upcoming earnings report. In the first quarter, SAP’s cloud order backlog climbed 25% on a currency-adjusted basis, and the market is looking for confirmation that this momentum has been sustained. Also in focus is the integration of Reltio, the master-data specialist acquired in May. Analysts expect management to outline how Reltio’s technology will accelerate the company’s AI roadmap and whether any early synergies are already embedded in the second-half outlook.
Consensus estimates peg second-quarter earnings per share in a range of €1.94 to €2.01. With no guidance updates allowed during the quiet period, daily volatility is instead being driven by US macroeconomic data and the broader tone in European technology stocks. The buyback program could cushion any further downside, but until the 23 July release, the shares remain hostage to external sentiment.
The next few weeks will be a waiting game. If the stock can hold above €135 and eventually reclaim the 50-day moving average, a base for recovery may be forming. A loss of that support, however, would refocus attention on the year’s low — and test whether the buyback is enough to prevent a deeper slide.
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