SAP's API Dispute Adds to Investor Jitters Ahead of a Pivotal Week

SAP shares hover near a 24-month low as a user revolt over API rules and cautious Q2 outlook overshadow solid Q1 earnings and AI plans ahead of Sapphire conference.

The tension at SAP is palpable. The software giant is heading into a critical stretch with its stock nursing a 28% year-to-date loss, a brewing conflict with its own user base over programming interfaces, and a management team trying to reassure markets that its AI ambitions remain on track.

Shares closed Friday at €144.40, hovering dangerously close to a 24-month low of roughly €139. That marks a near-47% decline from the 52-week high, and the chart is flashing warning signals. If that support level breaks, analysts warn the selling could accelerate.

The company’s first-quarter numbers were objectively solid. Revenue climbed to €9.6 billion, cloud revenue surged 27%, and operating profit jumped to €2.9 billion. But the market has looked past those figures, fixated instead on a cautious second-quarter outlook and a €408 million cash outflow tied to the Teradata legal settlement that crimped operating cash flow.

A User Revolt Over API Rules

Just as SAP needs to project confidence, it has ignited a fight with its most important constituency. The company has tightened the rules around its application programming interfaces, declaring that only explicitly documented APIs will be considered official going forward. The stated goal is to prevent uncontrolled data leakage and ensure technical stability, particularly around the use of generative AI through external systems.

The German-speaking SAP user group, DSAG, is pushing back hard. Chairman Jens Hungershausen warns the move could paralyze innovation, with unclear regulations deterring companies from connecting new AI solutions to SAP systems. While SAP insists existing customer integrations won't be affected in the short term and that the new rules primarily target new clients, the group is demanding immediate transparency on pricing models for upcoming contract renewals.

The timing couldn't be worse. The API controversy directly undercuts the narrative SAP hopes to build at its Sapphire conference in Orlando from May 11 to 13, where management plans to unveil the next iteration of its AI assistant Joule and outline the commercial model for future projects.

The Week Ahead: AGM, Buybacks, and a Make-or-Break Conference

Before Orlando, the virtual annual general meeting on May 5 will draw heavy scrutiny. The board is expected to address the ongoing €10 billion share buyback program, having completed the first €2.6 billion tranche in April. A dividend of €2.50 per share is also up for a vote.

The Reltio acquisition, aimed at strengthening the Business Data Cloud, is slated to close in the second or third quarter. The company has tied its full-year guidance to several conditions, including a de-escalation in the Middle East and the successful completion of that deal.

Analyst Views Diverge Sharply

The uncertainty is reflected in a wide spread of analyst targets. Goldman Sachs maintains a "Buy" with a reduced price target of €230, citing a strong order backlog. Barclays is "Overweight" at €220. JPMorgan sits at "Neutral" with €175, while the DZ Bank has a "Sell" rating and a €130 target.

The gap between the highest and lowest targets is a full €100 — a measure of just how divided the Street is on SAP's trajectory. The next two weeks will determine whether the company can bridge that gap with a convincing AI story, or whether the API dispute and cautious outlook will drive the stock through the €139 floor.