SAP’s €1 Billion AI Bet on Tabular Data Meets a Skeptical Market Ahead of Q2 Numbers
Published on 07/20/2026 at 07:42 | Redaktion boerse-global.de
SAP is doubling down on the one corner of artificial intelligence it believes matters most for its customers: structured business data. The German software giant has completed the acquisition of Freiburg-based startup Prior Labs, with a commitment to pour more than €1 billion into the venture over the next four years. The goal is to build a world-class research lab focused on so-called tabular foundation models — AI systems designed to handle the rows and columns of numbers that populate ERP systems, rather than the text and images that dominate consumer AI.
The move is a targeted bet. While much of the AI industry chases large language models, SAP sees an opportunity where its own core business sits: inside the spreadsheets, invoices, and supply-chain tables that underpin corporate operations. Prior Labs, founded only last year, will continue operating under its own brand and leadership, publishing its research and keeping models openly accessible. For SAP, the investment is a long-term play to embed AI directly into the workflows where its 400,000-plus customers already live.
But the market is not yet buying the vision. SAP shares closed Friday at €138.50, down 1.81% on the day, and now sit 33.53% lower since the start of the year. The stock is trading more than 21% below its 200-day moving average and within striking distance of its 52-week low of €130.80 — just 5.89% above that floor. The decline reflects a broader reckoning: after hitting over €263 in mid-2025 during the peak of the AI hype cycle, SAP has shed much of its valuation premium. The sector-wide anxiety was amplified by IBM’s disastrous pre-announcement, which erased $68 billion in market value in a single session and cast a pall over enterprise software names. Investors are questioning when — and whether — the billions flowing into AI will translate into sustainable revenue growth.
Should investors sell immediately? Or is it worth buying SAP?
There have been bright spots. On July 9, the European Commission dropped a long-running cartel investigation into SAP, removing a regulatory overhang that had weighed on sentiment. And the company is pressing ahead with capital returns: a share buyback programme worth up to €2.6 billion is running until July 31, a signal that management sees value in its own stock despite the recent slide. Operationally, SAP is also deepening its footprint in the Middle East, where the ALSAYER Group has launched a five-year digital transformation programme called iVolution, built around SAP S/4HANA and the Proaxia VSS solution.
The real test arrives on July 23, when SAP reports its second-quarter results. Analysts are looking for cloud revenue growth of roughly 22%, a figure that would need to hold even as the company funnels cash into Prior Labs and other AI initiatives. The stock’s 50-day moving average sits at €144.72 — a level that could become a near-term target if the numbers impress. The broader narrative, however, will hinge on whether SAP can convince the market that its €1 billion-plus AI wager will eventually pay off, rather than simply add to a list of expensive experiments. The competitive landscape is also shifting: hyperscalers like AWS and Microsoft Azure are racing to certify ever-larger instances for memory-hungry SAP HANA workloads, a reminder that the battle for enterprise AI infrastructure is only heating up.
Ad
SAP Stock: New Analysis - 20 July
Fresh SAP information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
