85% of German Companies Want to Ditch US Cloud Providers – But SAP Stock Still Hovers Near Its Low

Despite 27% cloud revenue growth and rising German demand for local vendors, SAP stock nears 52-week low as Oracle's $95B capex plan sparks industry margin fears.

A decisive shift in German corporate cloud strategy should, on paper, be a tailwind for SAP. The Bitkom Cloud Report 2026, released today and based on a survey of 603 companies, found that 85% of respondents consider their reliance on US-based cloud vendors too high – up from 78% last year. Nearly nine out of ten expressed a preference for German providers, while 37% said they would accept functional trade-offs or higher costs for a sovereign European solution. Yet for all that strategic promise, SAP’s shares are barely clinging to their floor.

The disconnect stems from sector-wide margin fears ignited by Oracle’s quarterly results on June 10. Despite record revenue and an earnings beat, Oracle’s stock slid after hours on news that it plans capital expenditures of up to $95 billion for fiscal 2027 – well above Wall Street estimates. The market read that as a cost escalation signal for the entire software industry. Goldman Sachs cut its gross margin forecast for SAP, citing higher hardware expenses in the second half of 2026. UBS downgraded European IT stocks, while JPMorgan kept its neutral rating and €175 price target, noting that Oracle’s cloud application growth had slowed for the first time in the current fiscal year – a potential warning for the sector. Goldman also pushed back its Fed rate-cut expectations from 2026 to 2027, increasing the discount factor for high-growth names like SAP.

The geopolitical landscape is compounding the pressure but also creating a counter-narrative. Over the weekend, the US government restricted access to Anthropic’s “Fable 5” and “Mythos 5” AI models for foreign users – a move analysts describe as a wake-up call for European businesses dependent on American AI. At the G7 summit in Évian, Germany and France jointly unveiled a common definition of digital sovereignty, promoting open-source solutions and modular architectures within the EU. SAP is positioned as a key beneficiary. Even a small event – the recertification of PCS Systemtechnik’s HR interface for time tracking and access control – underscores SAP’s deep embed in German Mittelstand processes.

The stock itself tells a grim near-term story. After closing at €139.10, it has since recovered marginally to €141.28, still just 4.25% above the 52-week low of €135.52. The year-to-date decline exceeds 30%, and the 200-day moving average at €186.60 is roughly a quarter above the current price. The RSI of 39.4 signals weak market posture but not yet oversold conditions – meaning further downside is technically possible.

None of this reflects SAP’s underlying business momentum. In the first quarter of 2026, cloud revenue rose 27%, total revenue reached €9.6 billion, and operating profit climbed 24% to €2.9 billion. The cloud backlog, on a currency-adjusted basis, swelled to €21.9 billion – evidence that customers continue to commit despite macro uncertainty. For the full year, SAP targets cloud revenue between €25.8 billion and €26.2 billion, with free cash flow around €10 billion.

Management is also building for the future. In May, SAP completed the acquisition of Reltio, a master data management specialist that helps unify disparate data sources for AI applications. To fund that and other deals, the company issued a €3.5 billion Eurobond in four tranches, leaving its Moody’s (A1, stable) and S&P (A+, stable) credit ratings untouched.

All eyes now turn to July 23, when SAP reports second-quarter results. The market will be watching whether cloud order intake and gross margins can maintain the first-quarter pace – the clearest test of whether the AI and sovereignty strategies are translating into commercial traction. Until then, SAP’s stock sits at the intersection of a long-term structural opportunity and a very short-term sector storm.