SAP's AI Offensive Meets a Bruised Share Price Ahead of Make-or-Break Earnings

SAP's shares have lost nearly half their value over the past year, yet the software giant pushes ahead with AI-driven acquisitions, a management reshuffle, and an aggressive share buyback before Q2 results on July 23.

SAP enters the final stretch of its earnings quiet period with a stock that has shed nearly half its value over the past year, yet the software giant is simultaneously pushing ahead with a sweeping AI-driven acquisition spree, a management reshuffle, and an aggressive share buyback. The contrast between strategic ambition and market performance could hardly be starker as the company prepares to report second-quarter and first-half results on July 23.

The shares closed on Friday at €138.50, barely budging on the week and trading just 5.89% above the 52-week low of €130.80 touched on June 25. Over the past 30 days, the stock has lost 6.52%, while the annualized 30-day volatility of 38.49% underscores the jittery trading environment. From the July 2025 peak of €265.75, the stock has fallen roughly 48%, with year-to-date losses of 31.44% and a 12-month decline of 47.09%.

Technically, the picture remains frail. The stock sits well below both the 50-day moving average of €145.72 and the 200-day line of €178.70, a gap of close to 23 percentage points. The relative strength index of 45.8 points to neutral territory, offering no clear directional signal. Support is anchored at the recent low, while the 50-day average stands as the first resistance level.

Dremio Deal Closes, Prior Labs Still Pending

SAP completed the acquisition of Dremio, a provider of an open data lakehouse platform designed to unify data from SAP and non-SAP systems. Analysts view the deal as a building block for the company's agentic AI ambitions, improving the data foundation for its Joule AI assistant. The purchase follows the integration of Reltio, whose takeover was announced in March 2026.

The more consequential AI deal, however, remains in limbo. On May 4, SAP unveiled plans to acquire Prior Labs, a pioneer in tabular foundation models, with a commitment to invest over €1 billion across four years to turn it into a leading frontier AI lab for structured data. The purchase price for the deal itself was not disclosed. More than two months on, the transaction is still awaiting regulatory approvals, and SAP expects to close it in the third quarter of 2026. Until then, Prior Labs is not part of the group, a detail that keeps the precise shape of SAP's AI strategy somewhat open.

Management Overhaul and New Partnerships

Quiet-period restrictions have not prevented SAP from executing on other fronts. On July 1, CEO Christian Klein restructured leadership under the banner "All-in on AI", consolidating control over AI development, platform architecture, and cybersecurity. The move gives Klein more direct oversight of the company's AI roadmap.

Separately, early July brought news of a deeper integration with IBM aimed at accelerating AI innovation. In late June, Nokia signed a multi-year RISE with SAP agreement that will see its S/4HANA environment run on Microsoft Azure, marking a significant cloud migration win.

Buyback Programme Gains Momentum at Lower Prices

Even as the stock struggles, SAP is stepping up its capital return. The company announced a €10 billion buyback programme in January 2026, running to the end of 2027. The first tranche of up to €2.6 billion, launched on February 5, will run no later than July 27. By April 1, SAP had already repurchased around 16.3 million shares at an average price of €161.16 — well above the current level. That means each subsequent buyback dollar now scoops up more shares, effectively accelerating the programme's impact on future earnings per share.

Earnings Countdown Begins

The quiet period, which bars management from commenting on ongoing business, will lift on July 23 when SAP releases its Q2 and first-half numbers at 22:05 MESZ, followed by an analyst conference at 23:00. Investors will focus on two key metrics: cloud revenue growth and operating margin. Both will indicate how fast the transformation and AI investments are paying off.

Until then, the stock is left to trade on technicals, sector sentiment, and any news regarding the Prior Labs clearance. With support at €130.80 and resistance near the 50-day moving average, analysts expect price action to remain range-bound — unless a surprise headline from Brussels or a sudden shift in tech sector mood triggers a breakout in either direction.