SAP’s Austerity and Antitrust Truce Fail to Stem Stock Slide as AI Costs Mount

SAP is fighting a battle on two fronts: it has just settled a long-running antitrust dispute with Brussels over its rigid support contracts, while simultaneously imposing a broad cost-cutting drive to rein in spiralling artificial intelligence expenses. The dual announcements have done little to calm investors, however, who sent the stock to a fresh 2026 low of €134.70 on Thursday — down 2.72% on the day and 33.32% below its level at the start of the year.

The European Commission formally accepted SAP’s commitments to overhaul its maintenance agreements for on-premise software, ending years of tension over what regulators viewed as anti-competitive lock-in practices. Under the new rules, customers gain far greater flexibility: they can now choose third-party maintenance providers for different system areas, and those who leave the official support programme entirely face far lower barriers to re‑entry. SAP will scrap re‑administration fees for returning clients and cap any back‑payments at six months or half the regular charge — with some older products completely exempt from such penalties. The concessions apply worldwide for ten years. Competition Commissioner Teresa Ribera described the decision as a benchmark for the entire industry and a warning for the fast‑growing cloud markets.

Yet the regulatory milestone came as SAP’s management signalled mounting cost pressures from the same cloud‑AI pivot that it hopes will drive future growth. An internal memo circulated on 2 July 2026, seen by employees, orders a near‑total hiring freeze outside the AI division, a pause on non‑essential business travel, and tighter caps on supplier spending. Only customer‑facing trips and AI‑related projects will receive budget approval. The company has also reactivated its “Spend Council”, a committee that scrutinises all procurement and external service provider expenses. Chief Financial Officer Dominik Asam told staff that the high operating costs of AI models — particularly the token consumption in large language models — are behind the belt‑tightening.

The austerity drive has been compounded by a failed acquisition attempt. SAP had been in talks to buy industrial‑AI specialist Cognite, but the Norwegian company opted instead for a $3.1 billion cash deal with Schneider Electric at the end of June. The missed takeover highlights a broader concern: SAP is struggling to secure critical intellectual property and AI talent against nimble competitors, a weakness that the market is now pricing into the stock.

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

The shares have now lost 49.36% from their 52‑week high of €266.00, and trade just 2.98% above the year’s trough of €130.80 set in late June. Technical indicators offer no respite: the relative strength index sits at a neutral 41.5, while the price remains well below both the 50‑day moving average of €145.77 and the 200‑day average of €179.14. The 30‑day volatility, at 45.69%, reflects sustained investor unease.

In parallel with the cost‑cutting, SAP has been quietly building out its AI capabilities. Earlier this month it completed the acquisition of data‑platform provider Dremio, a deal aimed at sharpening its ability to analyse vast datasets — a crucial component of the intelligent‑enterprise strategy that underpins its cloud transition.

All eyes are now on the half‑year results due after the close on 23 July. Management will release second‑quarter figures at 22:05, followed by an analyst call an hour later. The consensus expects revenue to rise to around €9.85 billion, with earnings per share improving from €1.46 to €1.76. Investors will be particularly focused on the cloud order backlog, which last quarter grew 25% on a currency‑adjusted basis. A repeat of that pace could offer the first sign that the stock’s long slide may be approaching a floor.