SAP Shares Face Headwinds as Client Spending Tightens

The ongoing decline in SAP’s share price continues unabated, even in the face of a substantial €10 billion stock buyback program. Analysis suggests the core issue lies not with the Walldorf-based software giant’s operations, but with the mounting pressures on its core customer base.

While cloud software itself is not subject to tariffs, providing SAP with minimal direct exposure to new U.S. import duties, the indirect consequences are significant. The manufacturing sector represents a crucial client segment for SAP, and this industry is now grappling with substantial cost inflation. Following the Supreme Court’s rejection of previous IEEPA tariffs, the Trump administration has enacted new levies under the Trade Act of 1974. These tariffs start at 10% and are scheduled to rise to 15% in the near term.

Economic Uncertainty Puts Brakes on IT Investment

Migrating an entire enterprise resource planning (ERP) system to the cloud is a major undertaking, far from a routine IT upgrade. Such projects demand significant capital, management focus, and time—resources that become scarce during periods of economic uncertainty. As import costs rise and sales outlooks dim, large-scale transformational projects are often the first to be delayed or shelved. For SAP, this dynamic implies that even a record €77 billion cloud backlog offers no guaranteed insulation from a potential slowdown in new contract signings.

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

The stock recently touched a 52-week low of €142.34, representing a decline of approximately 48% from its June 2025 high of €271.60. The company’s share repurchase initiative has so far been unable to counteract this persistent downward pressure.

Market Analysts Adjust Expectations

The cautious mood is reflected in recent analyst adjustments. JPMorgan downgraded SAP from “Overweight” to “Neutral,” simultaneously slashing its price target from €260 to €175. The firm cited a perceived deceleration in the cloud order backlog and broader strategic uncertainties. Barclays analyst Sven Merkt maintained an “Overweight” rating but also reduced his target, moving from €240 to €220. Merkt noted that while the company’s fundamentals remain solid, even robust quarterly results may struggle to alleviate investor concerns in the current climate. The current broad analyst consensus stands at “Moderate Buy,” with an average price target of around $305.

SAP is in a quiet period until April 23, restricting management from commenting on current business performance. The first-quarter report, due after this period, will be a critical test. It will reveal whether cloud growth has remained resilient despite macroeconomic headwinds and whether AI functionalities—already embedded in two-thirds of the fourth quarter’s cloud deals—are demonstrably contributing to new contracts. Should growth metrics disappoint expectations, pressure on the share price is likely to persist, regardless of the ongoing buybacks. A dividend payment of €2.50 per share is scheduled for May 6.