SAP’s Share Price Rebounds on Cloud Momentum, but Acquisition Costs Force a Reality Check
Published on 07/29/2026 at 07:52 | Redaktion boerse-global.de
The software giant SAP has staged a dramatic recovery over the past week, with its shares closing at €157.50 yesterday — a gain of 4.72% on the day and a staggering 20.67% over the past five trading sessions. Yet even after this surge, the stock remains 39.10% below its 52-week high from mid-2025, underscoring how much ground still needs to be made up. The rally was ignited by the company’s second-quarter and first-half results for fiscal 2026, released on July 23, which painted a picture of robust cloud growth tempered by rising costs tied to recent acquisitions.
Cloud Orders Surge Past Expectations
The headline number that caught the market’s attention was the current cloud backlog, which swelled to €22.9 billion on a currency-adjusted basis — a 26% jump that comfortably exceeded analyst forecasts. This metric, which measures contracted but not yet recognized cloud revenue, signals that SAP’s transition to a subscription-based model is gaining real traction. Total group revenue climbed 9.4% to €9.88 billion, while IFRS earnings per share rose from €1.46 to €1.89 year-on-year. Cloud revenue alone advanced 24% on a currency-neutral basis, cementing its role as the primary growth engine.
However, the operating picture was more nuanced. On a non-IFRS basis, operating profit grew 9% to €2.74 billion in the second quarter, but that figure fell slightly short of market expectations. The company also trimmed its full-year guidance for adjusted operating profit to a range of €11.8 billion to €12.2 billion, down from a previous ceiling of €12.3 billion. SAP attributed the revision to dilution from its acquisition spree — a clear signal that the cloud success story comes with a near-term price tag.
The Cost of AI Ambition
Two deals completed in July are at the heart of the margin pressure. SAP finalized the acquisition of Dremio, a US-based data-lakehouse platform, and Prior Labs, a Freiburg-based AI startup, both aimed at bolstering the company’s “Business AI” capabilities. Chief Financial Officer Dominik Asam disclosed that Dremio alone would weigh on operating profit by more than €100 million in the second half of the year. The Prior Labs integration is even more ambitious: SAP plans to invest over €1 billion in the venture over the next four years. These moves align with the company’s strategy to weave AI and cloud offerings more tightly together, but they also explain why some analysts are watching the cost line with caution.
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To fund these ambitions, SAP placed a €3.5 billion euro-denominated bond in May, earmarked for refinancing and general corporate purposes — a move that underscores the company’s comfortable financing position even as it spends heavily on growth.
Insider Confidence and Analyst Divergence
A notable development came just after the stock hit its year-to-date low on July 23. CEO Christian Klein purchased SAP shares worth €325,218.90 at an average price of €133.60, a transaction disclosed to BaFin. The buy was widely interpreted as a vote of confidence in the company’s long-term strategy, coming at a moment of heightened market anxiety. This contrasts with insider sales in mid-June, when several board and supervisory board members sold shares at around €146.17, primarily to cover tax obligations from the “MOVE SAP” employee participation program — a routine procedural matter with no direct bearing on the current price action.
Analyst reactions to the quarterly figures have been mixed, reflecting the tension between strong cloud momentum and rising costs. Barclays reiterated its “Overweight” rating but slashed its price target from €255 to €220, citing near-term cost uncertainties. JPMorgan struck a more cautious tone, maintaining a “Neutral” stance with a €175 target and pointing to the weaker operating result. Goldman Sachs trimmed its target from €230 to €215 while keeping a buy recommendation, and Deutsche Bank held firm with a €200 target and a buy rating. Jefferies and UBS both offered positive assessments, with Jefferies highlighting the strong order book and UBS praising the quality of the cloud backlog. The resulting price target range — from €175 to €220 — illustrates just how divided the Street is on whether the acquisition-related drag is a temporary blip or a longer-term concern.
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Technical Indicators Flash Caution
The speed of the recent rally has pushed SAP’s shares well above their moving averages, with the 14-day relative strength index at 66.3 — a level that suggests the stock is technically overbought in the near term. Annualized 30-day volatility stands at 48.71%, indicating that wide swings are likely to persist. Investors would be wise to view the recent surge in context: it is grounded in solid operational data, but the gap between the most bullish and most bearish analyst targets highlights how much uncertainty remains around the cost trajectory.
What’s Next
The next major catalyst arrives on October 21, when SAP reports third-quarter results. By then, the market will have a clearer sense of whether the company can manage the integration costs of Dremio and Prior Labs without derailing its cloud-driven growth story. For now, the rally reflects a market that is betting on the long-term payoff — but the margin for error is thin, and the cost question is far from settled.
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SAP Stock: New Analysis - 29 July
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