SAP Shares Rally as OpenAI Headwinds Ease, Yet Legal and Margin Worries Persist

A 3.92% jump on Friday gave SAP shareholders a rare moment of cheer. The catalyst came not from Walldorf but from a New York Times report that OpenAI is delaying its IPO until 2027 and grappling with financial troubles. For months, the spectre of artificial intelligence displacing traditional enterprise software has weighed heavily on the sector. That threat suddenly felt less immediate.

Adam Tindle of Raymond James noted that the stocks most vulnerable to the AI narrative – including SAP – posted the strongest gains on the day. Oracle, by contrast, slid around 3%, reflecting its deep exposure to OpenAI through a massive cloud infrastructure contract. RBC analyst Rishi Jaluria cautioned against over-optimism, arguing that enterprise software is not replaced overnight and that a widespread AI-driven displacement is not yet a reality for customers. Still, the mood in the sector may have found a floor.

Legal Escalation in California

The same Friday that brought relief also saw a judge in a California federal court grant Celonis permission to expand its antitrust lawsuit against SAP. The process-mining specialist is now permitted to add allegations of trade secret theft, escalating a dispute that already had the potential to create significant distraction for the DAX-listed company. A trial start date of 7 December 2026 has been set.

Separately, the European Commission continues to review competition remedies proposed by SAP in other proceedings. The legal and regulatory overhang adds another layer of uncertainty as the company navigates a strategic business transformation.

Margin Pressure and Quiet Period Constraints

Goldman Sachs recently lowered its gross margin estimate for the second half of 2026 to 72.8%, down from 73.3%, as SAP grapples with the costs of restructuring. The company is unable to comment publicly because it has entered the strictly regulated quiet period ahead of its next earnings release. That silence makes the margin outlook harder for investors to assess.

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

Buyback Provides a Floor

SAP’s €10 billion share repurchase programme, running through end-2027, has helped cushion the stock’s slide. To date, the company has bought back shares at an average price of €161.16. With the current price well below that level, the programme now offers management a material discount on further purchases – a rare silver lining in a year that has seen the stock lose roughly 33% of its value since January.

The shares closed Friday at €136.16, barely above a fresh 52-week low hit earlier in the week. The distance to the 200-day moving average is almost 26%.

Awaiting the July 23 Numbers

The next major catalyst is the second-quarter earnings report on 23 July 2026. Management has guided for full-year cloud revenue of around €26 billion. In the first quarter, cloud revenue rose 27% on a currency-adjusted basis, offering evidence that the core business is still gaining momentum.

Analysts have largely looked past the share price decline. Berenberg maintains a buy rating with a price target of €215, implying substantial upside from current levels. The margin revision from Goldman Sachs, however, reminds the market that the profit picture is less forgiving than the top-line growth suggests.

For now, SAP’s stock is caught between a promising cloud story, an unfolding legal saga, and the lingering question of whether AI will truly reshape the industry before the buyback runs its course.