SAP’s €21.9 Billion Cloud Backlog Can’t Mask a Stock That’s Lost 27% This Year

SAP shareholders approve dividend and charter changes unanimously, but stock falls 27% YTD. Cloud backlog hits €21.9B as firm bets €1B+ on AI data infrastructure.

SAP shareholders had little to complain about at this year’s virtual annual general meeting. With 99.91 percent approval on dividend distribution and 99.94 percent backing for a charter amendment allowing electronic share issuance, the votes were about as unanimous as they get. Around 69 percent of the share capital was represented. The dividend of €2.50 per share has already gone ex-dividend on May 6.

Yet the stock tells a different story. SAP closed Friday at €146.92, down 1.8 percent on the day and roughly 27 percent below where it started the year. That puts it well under the 200-day moving average of €197.86 and a world away from the 52-week high of €271.60.

Cloud Momentum Is Real, but the Market Wants More

The underlying business fundamentals remain robust. SAP’s cloud backlog hit €21.9 billion in the first quarter, a 25 percent increase in constant currency. Cloud revenue climbed 27 percent on the same basis, reaching nearly €6 billion — one of the largest cloud software revenue bases in European technology.

The company reaffirmed its full-year guidance, targeting cloud revenue between €25.8 billion and €26.2 billion for 2026. There is a caveat, however: management warned that second-quarter growth would moderate slightly due to one-off effects.

Orlando Beckons — With AI as the Main Attraction

All eyes now turn to Orlando. The SAP Sapphire & ASUG Annual Conference runs from May 11 to 13 at the Orange County Convention Center. CEO Christian Klein and the executive board are expected to detail how SAP is turning artificial intelligence into tangible business outcomes. A financial analyst conference with board presentations and a Q&A session follows on May 13.

The stakes are high. SAP has chosen a fundamentally different path from peers riding the direct AI demand wave. Rather than capitalizing on immediate GPU or memory shortages, the company is investing in the data infrastructure underneath. Two acquisitions announced in early May underscore this strategy.

Billion-Euro Bets on Data Readiness

SAP is spending over €1 billion over four years to build up Prior Labs, a pioneer in tabular foundation models — AI systems designed specifically for structured business data. The technology, whose TabPFN model series was published in Nature, is setting new benchmarks in academic research. Separately, SAP is acquiring Dremio, a data lakehouse platform that will extend its Business Data Cloud.

The logic is straightforward: most enterprise AI projects fail not because of the models, but because of fragmented data, proprietary formats, and missing business context. SAP is not just layering features onto existing systems — it is rebuilding the foundation, shifting from a system of record toward an AI execution layer for the entire enterprise.

Analyst Sentiment Remains Surprisingly Bullish

Despite the stock’s slide, 23 analysts recommend buying SAP shares and none recommend selling. The average price target of roughly €216 implies upside of more than 40 percent from current levels. That optimism hinges on the integration of the two acquisitions and the monetization of AI capabilities through the cloud platform.

The Sapphire conference offers SAP a chance to convince investors that the strategy is working. Klein has already signaled “fundamental changes” to the portfolio. If the company can demonstrate that its AI bets are translating into accelerated contract signings, the stock could begin to close the gap to that €271.60 high. If not, the bear market in SAP shares may have further to run.