SAP’s Cloud Engine Roars Back, But the Road to Recovery Remains Steep
Published on 04/25/2026 at 00:00 | Redaktion boerse-global.de
A brutal selloff that wiped more than a quarter off SAP’s market value this year came to an abrupt halt on Friday, as the German software giant delivered first-quarter numbers that blew past analyst forecasts. The stock surged over 5% to €147.64, offering a rare moment of respite for investors who have watched the shares languish far below their 200-day moving average.
The catalyst was unmistakable: the cloud business, long the centerpiece of SAP’s turnaround story, is firing on all cylinders. Currency-adjusted cloud revenue jumped 27% to €5.96 billion, comfortably exceeding market expectations. The twelve-month cloud backlog swelled to nearly €22 billion, signaling that customers are locking into long-term contracts at a faster clip than analysts had anticipated.
Margins Hit a Milestone
Perhaps more striking than the top-line beat was the leap in profitability. SAP’s adjusted operating margin hit 30%, a full percentage point above many estimates, as the company’s ongoing transformation program begins to bear fruit. The adjusted operating profit rose by nearly a quarter to €2.87 billion, a figure that caught the attention of even the most skeptical sell-side desks.
“This is the first clear evidence that the restructuring is translating into real earnings power,” one Frankfurt-based trader noted. The margin expansion came despite a one-off cash drain of €408 million from a legal settlement with US-based Teradata, which weighed on free cash flow but did little to dampen the broader mood.
Should investors sell immediately? Or is it worth buying SAP?
AI: Promises Deferred, Not Abandoned
Chief Executive Christian Klein has placed artificial intelligence at the heart of his growth narrative, and the quarter offered a glimpse of what that could mean in practice. A partnership with Daimler Trucks, for instance, saw AI tools boost contract win rates from 10% to over 40%, generating an estimated €70 million in financial impact.
But the company is careful not to overpromise on timing. Finance chief Dominik Asam acknowledged that the full commercial firepower of SAP’s AI offerings—which rely on integrating models from partners like Microsoft, Mistral, and now Google’s Gemini Enterprise rather than building proprietary large language models—will not show up in the income statement until 2027. In the near term, management has flagged a temporary deceleration in cloud growth during the summer quarter, a cautious note that tempers some of the immediate enthusiasm.
Analyst Cheers, With One Dissenter
The strong quarter prompted a wave of reaffirmed buy ratings from major investment banks. Deutsche Bank set a price target of €200, UBS went to €205, and Barclays lifted its target to €220, all maintaining bullish stances. Goldman Sachs and Jefferies also see the stock climbing well above the €200 mark.
The lone voice of caution came from DZ Bank, which continues to recommend selling the shares, citing stretched historical valuations. Still, the consensus is that SAP’s fundamentals are solid enough to support a recovery: the company left its full-year guidance unchanged, targeting an operating profit of at least €11.9 billion.
SAP at a turning point? This analysis reveals what investors need to know now.
Dividends and Buybacks Offer a Floor
For income-focused shareholders, SAP provided welcome clarity. The dividend has been set at $2.9291 per share, with payments flowing in mid-May. Meanwhile, the multi-billion-euro share buyback program continues to run in the background, offering a steady floor beneath the stock.
Yet the arithmetic of recovery is daunting. At €147.64, SAP shares still trade roughly 45% below the 52-week high set last June. The path back to those levels will require not just sustained cloud momentum, but also a convincing demonstration that AI can accelerate revenue growth sooner than the 2027 timeline currently projected. For now, the market is willing to give the company the benefit of the doubt—but the clock is ticking.
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