SAP’s Belt-Tightening Meets Analyst Skepticism Ahead of a Pivotal Earnings Update
Published on 07/11/2026 at 18:07 | Redaktion boerse-global.de
A sudden flare-up of US-Iranian hostilities sent a chill through European technology stocks this week, and SAP was no exception. Reports that American airstrikes had struck Iranian targets, shattering a short-lived ceasefire between the two countries, pushed the software giant’s shares back toward their lowest levels in a year. The geopolitical jolt amplified an already tense wait for the company’s second-quarter results, which are due after the market close on 23 July.
SAP stock finished the week at €138.50, barely above water with a 0.13% daily gain but still nursing a 0.59% weekly loss. The erosion runs deeper on a longer timeframe: the equity has shed 6.52% over the past month, 31.44% since the start of the year, and a staggering 47.09% over the last twelve months. At that level, the shares are trading just 5.89% above their 52-week trough of €130.80, reached on 25 June, and 47.88% below the all-time closing high of €265.75 from July 2025.
That dramatic descent has put the spotlight on a quiet period that began this week, during which management is barred from commenting on current business. The silence will be broken on 23 July at 22:05 CEST, when SAP publishes its numbers for the second quarter and first half of 2026, followed by an analyst conference call an hour later. Investors are keenly focused on two metrics: the cloud order backlog and the operating margin. After a strong first quarter – group revenue rose 6% to €9.56 billion, cloud revenue jumped 27%, and the operating margin cracked the 30% threshold for the first time in thirteen quarters – the market wants proof that the momentum is sustainable.
In the meantime, SAP has been pursuing a controversial cost-cutting drive that is drawing fire from some corners of the sell-side. The company is tightening spending on personnel and internal travel, concentrating new hires on core AI roles and shelving non-AI-related conferences. JPMorgan analyst Toby Ogg views the belt-tightening not as a sign of operational strength but as a reflection of the enormous capital demands created by the company’s AI push. He maintains a Neutral rating with a €175 price target. Other analysts are far more bullish: UBS’s target stands at €205, Berenberg at €215, Jefferies at €210 (reduced from a higher level but still a Buy), and Bernstein Research sees fair value at €276 – more than twice the current price. Yet the split in sentiment underscores the uncertainty about whether the cost discipline will protect margins or choke off the very growth that underlies those high targets.
Should investors sell immediately? Or is it worth buying SAP?
Part of SAP’s growth strategy involves expanding its data platform capabilities through acquisitions. The company announced on 6 July 2026 that it had completed the purchase of Dremio, a provider of open data-lakehouse technology. The deal is designed to bolster SAP’s agentic AI offering, allowing customers to combine data from SAP and non-SAP environments without moving or converting it. The acquisition joins a string of strategic buys that form the backbone of SAP’s data monetisation ambitions.
A separate but timely cushion for the stock is the ongoing share buyback programme. SAP is repurchasing its own shares on the open market in a tranche worth up to €2.6 billion, due to run through the end of July. Because the stock has fallen so steeply, the company is effectively scooping up its equity at a deep discount – a silver lining that also provides a modest floor under the price.
Technically, the shares are in a precarious position. They are trading 4.95% below their 50-day moving average of €145.72 and a significant 22.50% below the 200-day average of €178.70. The relative strength index of 45.8 points to a neutral market, with neither overbought nor oversold conditions. The critical line in the sand remains the 52-week low of €130.80. A decisive break below that level would reinforce the persistent downtrend that has punished the stock over the past 12 months.
SAP at a turning point? This analysis reveals what investors need to know now.
Until the earnings release, three forces will determine the direction: the trajectory of geopolitical tension in the Middle East, the broader mood in the technology sector, and whether the buyback can absorb enough selling pressure. If the 23 July numbers can show that cloud growth is translating into durable margin expansion, the current bargain-basement valuation may yet attract buyers betting on a rebound. But if the figures disappoint, the floor at €130.80 could give way.
Ad
SAP Stock: New Analysis - 11 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.
