SAP's Marathon: A Test of Cloud Momentum and Investor Patience

All eyes are on Walldorf this week as SAP prepares to report first-quarter earnings. The software giant’s stock, trading near 151 euros, has shed roughly a quarter of its value since the start of the year and sits nearly 45% below its 52-week high of 271.60 euros from June 2025. The upcoming numbers, due after market close on April 23, represent a critical juncture for CEO Christian Klein and CFO Dominik Asam to demonstrate their strategic plan is gaining traction.

Analyst expectations are set high. The consensus forecast calls for earnings per share of $1.91, a 26% year-over-year increase, on revenue of approximately $11.3 billion, which would represent growth of almost 19%. Yet the figures investors will scrutinize most closely relate to the cloud. After missing expectations for its cloud backlog in January, SAP’s performance in this segment is under a microscope. For the full year, the company is targeting roughly 26 billion euros in cloud revenue.

The market’s skepticism was underscored just days before the report when Deutsche Bank trimmed its price target on SAP shares from 220 to 200 euros, though it maintained its buy rating. Analysts at the bank cited expectations for weaker near-term margin development, cautioning that a recent sector rebound might be a reaction to overly pessimistic positioning rather than a genuine trend reversal. The long-term investment case, however, is seen as intact.

Should investors sell immediately? Or is it worth buying SAP?

Beyond the quarterly scorecard, SAP is laying groundwork for its future. In late March, the company announced plans to acquire software provider Reltio, a move designed to bolster its enterprise data cloud. The acquisition aims to help customers better prepare master data for artificial intelligence applications, a key pillar of SAP’s transformation. Supporting this long-term shift, the supervisory board recently extended the contract of Chief People Officer Gina Vargiu-Breuer ahead of schedule, securing her leadership through January 2030. This continuity signals the company views its AI-driven restructuring as a marathon, not a sprint, with Vargiu-Breuer tasked with guiding the workforce through the transition.

Technically, the stock’s Relative Strength Index sits at 37, indicating an oversold market but not necessarily providing a clear buy signal. The price is testing a significant chart support zone. A potential near-term catalyst arrives with the annual general meeting on May 5, where shareholders are expected to approve a dividend of 2.50 euros per share, with payment scheduled for May 8.

The coming days will define the near-term trajectory. Should Thursday’s report deliver robust cloud growth and reassure on margins, the stock may find footing to end its recent weakness. Another disappointment, however, could see the shares retest recent lows. For SAP, the quarterly showdown is about proving its marathon pace is finally yielding visible results.

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