SAP Races to Reinvent Itself with Two AI Deals and a Brussels Win, but the Market Demands Proof
Published on 07/19/2026 at 21:23 | Redaktion boerse-global.de
SAP enters the final stretch before its July 23 quarterly report having settled a long-running EU antitrust probe and closed two separate artificial intelligence acquisitions in as many weeks, yet the stock continues to drift near its 52-week low. The software giant finished Friday at €138.50, down 1.81% on the session and 33.53% below its start to the year — a slide that leaves it just 5.89% above the June trough of €130.80.
The German company has been stockpiling AI capabilities at pace. It bought Freiburg-based Prior Labs, a specialist in tabular foundation models that scan structured business data — such as payment delays or supplier risks — to generate predictions. Founded only last year, Prior Labs will remain an independent brand with offices in Freiburg, Berlin and New York. SAP plans to funnel more than €1 billion into the startup’s research team over the next four years, tapping what chief technology officer Philipp Herzig calls a largely untapped opportunity: marrying AI with the kind of structured data that sits on SAP’s HANA cloud platform.
That deal was preceded by the acquisition of Dremio, a data-lakehouse platform vendor that should accelerate SAP’s so-called agentic AI strategy — software agents capable of autonomously executing tasks. The two purchases together aim to give SAP a broader AI arsenal, but analysts are waiting to see whether the technology translates into billings. “The monetisation of AI agents at large customers is taking longer than expected,” UBS analyst Michael Briest wrote after slashing his price target on the stock from €205 to €164 while keeping a “Buy” rating.
Should investors sell immediately? Or is it worth buying SAP?
The regulatory overhang that had dogged SAP for years has also been lifted. On July 9 the European Commission formally closed its cartel case into the company’s maintenance and support policies, sparing SAP a potential fine that could have run into the billions. In return, SAP gave binding ten-year commitments, including a pledge not to charge reactivation fees on on-premise systems. The German SAP user group DSAG welcomed the move; its board member Michael Bloch said the concessions strengthen customers’ freedom to choose between maintenance providers.
Yet the share price has remained stubbornly low. Friday’s drop was partly tied to a profit warning from US rival IBM, which stoked fears that corporate IT budgets could be reshuffled away from software. Broader macro concerns — including the Iran conflict and a sector rotation out of technology — have also weighed. JPMorgan rates SAP “Neutral” with a €175 target, while Morningstar’s Rob Hales pegs fair value at €265 but cautions that budget risks are real.
The buyback programme, authorised for up to €2.6 billion and due to expire on July 31, may offer some technical support in the coming week. But the real test comes on the evening of July 23, when SAP releases its second-quarter and first-half results. The market consensus expects cloud revenue to grow 22% — the key metric by which investors will judge whether the AI push is beginning to pay off. In a year that has already wiped a third off the stock, a miss could deepen the damage, while a beat might finally give sceptics reason to rethink.
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