SAP’s Earnings Due Tonight as Stock Hovers Near a Year Low — and a €1 Billion AI Bet Adds Intrigue
Published on 07/23/2026 at 07:51 | Redaktion boerse-global.de
The German software giant is set to release its second-quarter results after the closing bell, and the stakes could hardly be higher. SAP’s shares closed at €130.78 on Wednesday, just 0.83% above the 52-week trough of €129.92, after shedding 3.74% in a single session. The stock has now lost 7.29% over the past seven trading days and sits 37.23% lower since the start of the year.
The slide has pushed the relative strength index to 37.5, a level that typically signals oversold conditions, though the stock remains well below all key moving averages. That technical setup leaves the door open for a rebound — but only if the numbers tonight provide the catalyst.
Cloud Backlog Takes Center Stage
Analysts are bracing for a cloud revenue figure of €6.255 billion in the second quarter, with total group revenue expected at €9.85 billion. Adjusted earnings per share are forecast at €1.75. But the real focus will fall on the current cloud backlog, a forward-looking metric that tracks committed cloud contracts.
SAP had already warned in the first quarter that cloud growth was flattered by one-off effects and that a deceleration was coming in Q2. For the full year, management expects a slight decline in the constant-currency growth rate of the current cloud backlog, which stood at 25% in 2025. The critical question tonight is whether the slowdown is as mild as the market has priced in — or whether it stings more than expected.
Should investors sell immediately? Or is it worth buying SAP?
The first quarter offered a solid reference point: the current cloud backlog rose 20% to €21.9 billion, cloud revenue climbed 19%, and the cloud ERP suite jumped 23%. SAP has reaffirmed its full-year guidance for cloud revenue between €25.8 billion and €26.2 billion, representing 23% to 25% growth at constant currencies. That target band will serve as the benchmark for tonight’s report.
A Billion-Euro AI Bet in the Background
Just days before the earnings release, SAP closed the acquisition of Freiburg-based startup Prior Labs on July 20, committing more than €1 billion over four years to build it into an independent AI research lab. The startup specializes in tabular foundation models — AI systems designed for structured business data — and its TabPFN-2.6 model tops the TabArena benchmark, delivering results in seconds that traditional AutoML methods take roughly four hours to produce.
SAP plans to integrate the technology into its AI Core services, Business Data Cloud, and the Joule AI assistant. Prior Labs launched just 15 months ago with a €9 million pre-seed round and counts renowned AI researchers Yann LeCun and Bernhard Schölkopf among its scientific advisors. The acquisition signals that SAP is serious about embedding AI into its product suite, but it also raises questions about how quickly such investments will translate into revenue growth — a topic investors will be watching closely when management takes questions tonight.
Structural Support and Headwinds
On the bullish side, SAP’s €10 billion share buyback program, launched in January 2026 and running through the end of 2027, provides a structural floor. The first tranche of roughly €2.6 billion was completed on April 1 at significantly higher prices than today’s levels. If SAP continues repurchasing shares at current depressed valuations, the buyback becomes mechanically more supportive of the stock price.
Analyst sentiment remains broadly positive despite the selloff. Of 18 ratings tracked, 14 are buys, three are holds, and only one is a sell. The average price target stands at €199.57 — a substantial premium to the current level.
Yet the bears have their arguments too. Jefferies cut its price target ahead of the results, citing a weak environment for the entire European software sector rather than company-specific issues. The current earnings season lacks the momentum seen in other tech verticals, the bank noted. Concerns that generative AI could eventually commoditize traditional software also continue to weigh on valuations, according to market observers.
The seasonal pattern adds another cautionary note. Over the past 25 years, SAP shares have posted positive returns only 44% of the time between late July and early October, with an average decline of 4.72% during that window.
SAP at a turning point? This analysis reveals what investors need to know now.
The Chart Says: Watch €129
Technically, the €129 zone has become the line in the sand. A sustained break below that level could accelerate the downtrend. With the RSI at 37.5 and the stock hugging its 52-week low, the setup is primed for a snapback — but only if the cloud backlog data and full-year guidance provide the necessary fuel.
The 50-day moving average sits at €144.35, underscoring how far the stock has fallen in recent weeks. Volatility has climbed to roughly 34% on a 30-day basis, reflecting the heightened anxiety around the name.
Tonight’s report will determine whether SAP can shake off its months-long funk or whether the weakness persists. The cloud backlog number, in particular, will decide whether the oversold technical picture gives way to a relief rally — or whether the bears tighten their grip.
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