SAP’s €2.6 Billion Buyback Tested by Geopolitical Headwinds and US Tech Dependencies

SAP’s €2.6B buyback struggles to support shares down 47% YoY, amid AI reliance risks, US export controls, and geopolitical tensions. Q2 results on July 23 key.

SAP is buying back its own shares at a furious pace—up to €2.6 billion by the end of July—even as the stock hovers just 5.89% above its 52-week low. The software giant closed Friday at €138.50, a marginal daily gain of 0.13%, but the weekly picture was less flattering: a 0.59% dip, while the monthly decline stretched to 6.52%. Year-to-date the shares have shed 31.44%, and over twelve months they have lost 47.09%.

The buyback’s timing is striking. With the share price near its floor, every euro spent by SAP brings back more equity than it would have a year ago, when the stock was trading close to its 52-week high of €265.75. Yet the programme has done little to arrest the downtrend. Analysts point to deeper structural concerns that are weighing on the name.

Chief among them is SAP’s reliance on US technology for its AI assistant Joule, which runs on Anthropic’s Claude language model and Nvidia hardware. US export controls could limit access to future high-end models, a risk that would undermine SAP’s “autonomous enterprise” vision. JPMorgan analyst Toby Ogg, who rates the stock a “hold” with a €175 target, sees the company’s cost-cutting programme “Project Fuji” not as a sign of financial discipline but as evidence of the massive capital needed to compete in the AI race against American hyperscalers. Not everyone is that downbeat: Berenberg and UBS have recently lifted their price targets above €200.

Technically, the shares are in no man’s land. The RSI sits at 45.8, a neutral reading. The first upside hurdle is the 50-day moving average at €145.72, a level the stock is currently 4.95% below. On the downside, the 52-week low of €130.80, touched on June 25, remains the critical support. The 200-day moving average at €178.70 underscores how far the stock has fallen: 22.50% below that line. Annualised 30-day volatility of around 38.5% reflects the persistent nervousness around the name.

Adding to the pressure is a fresh geopolitical shock. Reports of US airstrikes on Iranian targets ended a brief truce between Washington and Tehran earlier this week, sending a chill through European technology stocks. Until those tensions ease, the sector is likely to remain under a cloud.

The real test comes on July 23, when SAP releases second-quarter and first-half results. Before then, trading is expected to be cautious, with attention fixed on two catalysts: cloud backlog growth and any new AI partnerships. If the numbers and the restructuring narrative convince sceptics, the shares could find a floor. But with the stock already skirting its low and a negative macro backdrop, the buyback alone may not be enough to turn the tide.