SAP Races to Deploy 200 AI Agents While Buyback Struggles to Halt Stock Slide

SAP shares trade at €141, just 7.8% above 2024 low, as a €2.6B buyback above market price and an internal AI overhaul face cloud revenue headwinds from a key Middle East customer.

SAP shares are trading at €141.00, a mere 7.80% above the year’s low of €130.80 touched on June 25, as the software giant enters a quiet period that will last until second-quarter earnings are released on July 23. With management barred from commenting on business conditions, investors are left to weigh two countervailing forces: a €2.6 billion share buyback that has so far bought shares at above-market prices, and an ambitious internal AI overhaul that the company hopes will redefine its long-term growth story.

The buyback, running since February, has already consumed roughly 16.3 million shares at an average cost of €161.16 per share — well above the current quote. That means every euro spent now buys more stock than before, increasing the programme’s mechanical impact on the float. But the structural support has not prevented the stock from losing 30.20% since the start of the year, and the real question is whether the repurchase can compensate for the absence of fresh news.

On the operational side, SAP is betting that a radical reorganisation of its artificial intelligence capabilities will unlock a new growth chapter. The company has split its AI efforts into two new power centres: Philipp Herzig will lead the newly created business AI platform, while Manoj Swaminathan takes charge of the autonomous suite covering core areas like finance and HR. Both report directly to CEO Christian Klein. Michael Ameling is leaving the company. The goal is to integrate more than 200 AI agents into SAP’s own processes by the third quarter of 2026, with the longer-term aim of largely replacing manual coding. Klein has ruled out further job cuts related to the transformation, instead retraining existing staff to manage the new autonomous systems.

Yet the near-term earnings picture is clouded. The company’s cloud backlog grew 20% to €21.9 billion in the first quarter, and cloud revenue rose 19%, while earnings per share improved from €1.52 to €1.66. But a major customer in the Middle East is expected to scale back activity, hitting cloud revenue growth through the second quarter — precisely the segment on which the entire bull case rests. Goldman Sachs recently cut its gross margin forecast for the second half of 2026 to 72.8% from 73.3%, citing costs from scaling cloud infrastructure and integrating new AI services.

Chart watchers see little relief. The stock is trading 3.71% below its 50-day moving average of €146.43 and a staggering 22.33% below the 200-day average of €181.53, confirming a well-established downtrend. With annualised 30-day volatility at 45.49%, big swings in either direction remain a live possibility. The relative strength index stands at 48.5, neutral territory that provides no directional clue.

Not all external signals are negative. Investment bank Guggenheim upgraded US rivals Salesforce and ServiceNow to “buy”, a move that lifted sentiment across the sector. SAP’s shares closed at €140.88 on July 1, and the broader mood in European technology will likely dictate short-term moves until the earnings date. Meanwhile, the company has appointed Verena Siow to lead its Asia-Pacific region from Singapore, tasked with accelerating cloud sales in a market that remains underpenetrated.

For now, the stock is caught between a buyback that provides a floor near the year’s low and an AI narrative that still needs to deliver tangible results. The July 23 earnings release will be the first concrete catalyst since the quiet period began. If the numbers confirm the first-quarter momentum and the AI reorganisation starts to show early signs of paying off, the buyback’s increasing efficiency at lower levels could help form a base. A break below €130.80, however, would signal that the support efforts have failed and open the door to further selling pressure.