SAP’s 46% Rout Contradicts Bullish Analyst Calls as Oracle Shock and EU Scrutiny Deepen Cloud Cost Fears

The German software giant has lost nearly half its market value over the past twelve months, yet the sell-off continues. SAP shares closed at €134.00 on Friday, a whisker above the fresh 52-week low of €132.26 set earlier in the session. Since the start of the year, the stock has shed roughly 34%, with the twelve-month decline clocking in at 46%. The slide has accelerated despite a cloud-order backlog that grew 20% in the first quarter to €21.9 billion — a disconnect that has left analysts deeply divided.

Nowhere is the split wider than in the target prices. Bernstein rates SAP a buy with a €276 target, while JPMorgan assigns a “Hold” recommendation and a price objective of just €175 — a gap of €101. Berenberg and UBS fall in between: both maintain buy ratings, with targets of €215 and €205 respectively. The divergence reflects competing narratives on whether the current valuation is a once-in-a-decade opportunity or a value trap. Goldman Sachs added to the bearish case by cutting its margin forecast for the second half of 2026, citing rising hardware costs that are squeezing profitability.

The market’s primary fear came into sharp focus after Oracle unveiled plans to invest up to $95 billion in its cloud infrastructure. The announcement triggered a sector-wide rout, hammering European software names that investors perceive as lagging in the artificial-intelligence race. SAP, despite its own cloud momentum, has been caught in the downdraft. The stock now trades nearly 28% below its 200-day moving average, and the relative strength index stands at 33.6 — close to oversold territory but offering no clear reversal signal yet.

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

Attention turns to the company’s second-quarter earnings due on July 23. Expectations are more subdued after a strong start to the year, partly because one-off benefits from the first quarter will not repeat. Management has already warned of a slowdown in cloud growth. Compounding the caution, a large customer in the Middle East is scaling back its activities. The cloud order book, while still expanding, will be closely watched for signs of deceleration, as will the cloud gross margin. Meanwhile, the European Commission is investigating whether SAP has restricted competition in the aftermarket for ERP maintenance. Signals from Brussels suggest a settlement may be reached out of court.

SAP has not been idle on the capital-allocation front. A €2.6 billion share-buyback program — the first tranche of a larger authorization running through 2027 — has been completed at an average price of roughly €161 per share. Yet the buyback failed to stem the decline, and the stock now trades well below that average repurchase level. To finance strategic moves, the company placed €3.5 billion in bonds in late May. The proceeds will help fund the acquisition of data-platform provider Dremio, a deal expected to close in the third quarter. Management sees Dremio as a tool to bolster SAP’s own artificial-intelligence capabilities.

The next catalyst, however, is the July 23 earnings report. If the cloud order backlog holds up better than feared, the oversold technical picture could spark a rebound. But if the headwinds from Oracle’s spending spree, rising hardware costs, and fading one-time effects prove too strong, the 52-week low may not hold for long.