SAP's 19% Cloud Growth Can't Save It From 52-Week Low as Three Headwinds Collide

SAP's cloud revenue jumps 19% to €6B as stock hits 52-week low. Oracle's $95B AI spending, Fed rate hikes weigh, but antitrust probe may close. Analysts target €276.

SAP's cloud business is firing on all cylinders — yet the stock is plumbing depths not seen in a year. The Walldorf-based software giant's shares closed the week at €134.00, nudging just above a fresh 52-week low of €132.26 struck on Friday. Year-to-date, the stock has shed roughly 33% to 34% of its value, and it now sits nearly 50% below the July 2025 all-time high of €266.00. The disconnect between operational momentum and market sentiment could hardly be starker.

Investors have three main worries in their crosshairs. The first came from across the Atlantic: Oracle shocked the sector by unveiling plans to spend as much as $95 billion in its 2027 fiscal year, stoking fears of an industry-wide cost explosion for AI infrastructure. UBS responded by downgrading European IT stocks, and SAP lost roughly 5% in a single week. Days earlier, Goldman Sachs delivered a separate blow, trimming its forecast for SAP's gross margin in the second half of 2026 on rising hardware costs — a move that sent the stock sliding another 4% in one session. Goldman kept its buy rating unchanged, but the damage was done.

Macro headwinds have compounded the pain. The Federal Reserve, under new chair Kevin Warsh, has signaled a bias toward rate increases rather than cuts. Goldman Sachs now expects no easing until 2027 at the earliest, a backdrop that punishes growth stocks like SAP. Technically, the picture is equally unflattering: both the 50-day moving average at €148.56 and the 200-day moving average at €185.65 sit well above the current price, a configuration that often spooks short-term traders.

A third cloud — this one regulatory — appears to be thinning. Since September 2025, the European Commission has been investigating possible antitrust violations in SAP's maintenance services, with the theoretical risk of a fine reaching 10% of annual revenue. But Brussels is now testing concessions offered by the company, including greater freedom for customers to choose alternative providers and the elimination of certain fees. If no serious objections materialize, the probe could close without a penalty. SAP expects no material financial fallout.

Despite the barrage of bad news, analysts remain surprisingly bullish. Bernstein sees the stock doubling from current levels, with a target of €276. Berenberg sticks to "Buy" with a €215 price target, while UBS reaffirms its buy rating at €205 and Bank of America also recommends buying. Even so, JPMorgan and the DZ Bank have struck a more cautious tone. Berenberg analyst Nay Soe Naing conceded that software stocks are broadly out of favor and trading at historically low valuations, but he pointed to SAP's stable revenue growth and expanding order backlog as reasons to hold on.

The market's skepticism flies in the face of robust operational data. In the first quarter, SAP's cloud order backlog jumped 20%, cloud revenue climbed 19% to roughly €6 billion, and operating profit rose by a double-digit percentage. The next major catalyst arrives on July 23, when SAP reports second-quarter results. Investors will scrutinise the cloud backlog growth rate and the trajectory of gross margins. A €2.6 billion share buyback programme, running through July 2026, offers a floor under the stock in the meantime — but it has yet to stem the tide of selling.