Oracle’s AI Spending Jitters Drag Nemetschek to 52-Week Low Despite Record Q1 and $2.4B Deal

Oracle's AI spending shock hit European software stocks, sending Nemetschek to a 52-week low. Despite record Q1 results and 92% recurring revenue, analysts see overdone pessimism with a €115 target.

When Oracle flagged heavier-than-expected capital outlays for AI infrastructure and a deceleration in its cloud business last week, the shockwaves rippled across the Atlantic. European software stocks were repriced almost overnight. Nemetschek, the Munich-based construction software group, was caught in the downdraft: its shares slid to an intraday low of €52.65, a fresh 52-week trough, and now trade at roughly €54.15 — a year-to-date decline of 40%.

The sell-off sits uncomfortably alongside the company’s underlying performance. Nemetschek delivered what management called the best quarterly result in its history in the first quarter. Revenue climbed 17% to €313 million, while operating profit jumped 22%. Over 92% of sales are now recurring, providing a resilient revenue base that most software peers would envy. The board has kept its full-year guidance unchanged: organic expansion of 14% to 15% and a stable operating margin of about 33%.

Analysts argue the market’s pessimism is overdone. Berenberg reiterated its buy rating on Nemetschek this week, with analyst Nay Soe Naing setting a price target of €115 — more than double the current share price. “Stable growth is not attracting buyers right now,” he noted drily, pointing to the disconnect between operational strength and valuation.

Behind the scenes, management is executing a two-pronged strategy to reinforce Nemetschek’s technology edge. In mid-June the group took a stake in Dawex, a French data-exchange specialist, as part of a financing round that leaves the founders firmly in control. The investment is modest and near-term profit impact is negligible, but CEO Yves Padrines sees it as essential for the next decade of innovation: “Regulated data exchange is the foundation for agentic AI in construction,” he said. The move positions Nemetschek to accelerate complex building processes through artificial intelligence without having to build the data infrastructure from scratch.

The bigger strategic play is the planned $2.4 billion acquisition of US infrastructure software firm HCSS — the largest deal in Nemetschek’s history. Private-equity owner Thoma Bravo will, as part of the transaction, receive a 28% stake in Nemetschek’s “Build & Construct” segment. Closing is expected in the second half of 2026, pending approval from US regulators. The sheer scale of the acquisition has added to investor uncertainty, but management insists the long-term logic is sound: HCSS extends Nemetschek’s reach in the North American heavy civil engineering market.

Technical indicators suggest the stock may be oversold. The relative strength index sits at roughly 36, a level often associated with a potential bounce. The next major catalyst comes on July 30, when Nemetschek publishes its half-year report. If the company confirms its full-year targets then — against a backdrop of heavy sector selling — it could provide the spark for a recovery. Until then, Oracle’s shadow continues to hang over the entire European software landscape, punishing even those names whose own numbers tell a far more positive story.