SAP's Rally Faces a Fork in the Road: Cloud Orders Soar While Margins Do the Heavy Lifting
Published on 08/04/2026 at 03:44 | Redaktion boerse-global.de
The past week has delivered a rare double dose of good news for SAP shareholders, and the market is finally responding. The software giant's shares climbed 3.59 percent on Monday to close at 165.00 euros, extending a recovery that has now added 17.32 percent over the past 30 trading sessions. The catalyst mix is unusually favorable: a regulatory all-clear from Berlin and a record cloud order book that has investors looking past a trimmed profit forecast.
The Antitrust Cloud Lifts
The most immediate trigger came from an unexpected corner. Germany's Federal Cartel Office announced on Thursday that it was closing its preliminary investigation into SAP over alleged abuse of market power in data access — and crucially, without imposing any conditions. The probe had been launched following a complaint from competitor Celonis, a process-mining firm that had accused SAP of anticompetitive behavior. With that overhang removed, the shares found fresh buying interest that carried into Monday's session, a day that also saw the DAX breach the 26,000-point mark for the first time, with SAP and Deutsche Telekom providing much of the lift.
A Backlog That Speaks Volumes
Underneath the legal headlines, the second-quarter numbers released on July 23 continue to do the heavy lifting. SAP grew cloud revenue by 24 percent to 6.28 billion euros, while the cloud backlog — the contracted but not yet delivered business that serves as a forward-looking demand indicator — expanded 27 percent to a record 22.9 billion euros. That order reserve is the metric investors have latched onto, as it signals that demand for SAP's cloud offerings extends well beyond the current fiscal year.
The catch is that this growth is coming at a cost. Non-IFRS operating profit rose just 7 percent to 2.74 billion euros in the quarter — a pace that trails the revenue trajectory notably. Management attributed the drag to dilution effects from the recently completed acquisitions of Dremio and Prior Labs, both closed in July. As a result, the company trimmed its 2026 non-IFRS operating profit guidance to a range of 11.8 to 12.2 billion euros.
Should investors sell immediately? Or is it worth buying SAP?
The Margin Question That Defines the Trade
That guidance cut is the central tension in the SAP story right now. The market's willingness to look past it — the stock rose despite the reduction — suggests investors are betting that the margin pressure is a temporary integration phenomenon rather than a structural shift. The question hanging over the shares is straightforward: once Dremio and Prior Labs scale within the SAP ecosystem, will the cloud growth translate into profitable growth, or will the margin drag persist longer than management has signaled?
Valuation metrics suggest the market is pricing in a gradual improvement. SAP trades at roughly 22 times 2026 consensus earnings, dropping to about 19.4 for 2027. The enterprise value-to-operating-profit ratio is expected to decline from 14 this year to 12 next year. For income-oriented investors, the stock remains more of a growth vehicle than a yield play: the estimated dividend yield stands at just 1.7 percent for 2026 and 1.9 percent for 2027, while the cash flow yield is projected to improve from 5.6 to 6.5 percent.
Analysts Split, But the Buy Camp Holds
Wall Street's view on SAP has rarely been more divided. Goldman Sachs trimmed its price target from 230 to 215 euros but maintained its buy rating — a signal that the bank views the operational dip as transitory. Jefferies also reaffirmed a buy with a 210-euro target on July 28, citing sustained momentum in cloud subscriptions. At the optimistic end of the spectrum, Bernstein sees the stock at 273 euros, implying substantial upside from current levels. The full range of analyst targets, however, extends all the way down to 120 euros, underscoring just how divergent the views on SAP's growth prospects have become.
Buybacks, Insider Buying, and a Shifting Shareholder Base
Several supporting pillars have emerged beneath the rally. SAP launched the second tranche of its 2026 share buyback program on July 27, with a volume of up to 2.6 billion euros — roughly 18.5 million shares. The overall program, running through the end of 2027, totals 10 billion euros and signals management's confidence in the company's valuation. Just days earlier, on July 24, CEO Christian Klein purchased shares worth 325,219 euros at an average price of around 133.60 euros — well below current levels, a gesture that has not gone unnoticed.
The shareholder register is also shifting. Anchor investor Harald Tschira increased his voting rights stake from 0.57 to 4.22 percent through new voting agreements with additional family companies, according to a voting rights notice filed on Friday. Such consolidation typically strengthens the long-term-oriented investor base. There is also a fresh growth angle: SAP recently announced an innovation partnership with insurer SIGNAL IDUNA to jointly develop AI applications for the insurance sector.
SAP at a turning point? This analysis reveals what investors need to know now.
The Technical Hurdle Ahead
For all the recent strength, the chart still tells a cautionary tale. The stock remains roughly 5.46 percent below its 200-day moving average of 174.35 euros — a level that now serves as the key technical battleground. A sustained break above that line would offer the first confirmation of a broader trend reversal, chart watchers say. Until then, the medium-term downtrend remains formally intact, even as the short-term picture has brightened considerably.
The next major data point arrives on October 21, when SAP reports third-quarter results. Between now and then, the margin trajectory will be the metric to watch. If the cloud backlog continues to build and the buyback keeps underpinning the market, the recovery should retain its momentum. Should margin pressure resurface — through higher integration costs or slower-than-expected scaling at Dremio and Prior Labs — the recent gains could prove fragile. For now, the market is choosing to focus on the record order book rather than the near-term profit squeeze. Whether that judgment holds will become clearer in the coming months.
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