SAP’s Cloud Backlog Hits €22 Billion, Yet the Stock Can’t Shake Its Slump

SAP’s cloud backlog hits €22B and profits rise, but shares drop 28% in 2025. Analysts diverge on AI catalysts and M&A risks.

The disconnect at SAP is growing harder to ignore. The software giant’s cloud business is firing on all cylinders, its operating profit is climbing, and its order book has swelled to nearly €22 billion. Yet the share price tells a very different story. Since the start of the year, the stock has shed roughly 28% of its value, landing at around €145 — a far cry from the summer 2025 record high that now sits almost 50% above current levels.

That gap between operational strength and market sentiment has split the analyst community. Barclays sees opportunity in the wreckage. Analyst Sven Merkt reaffirmed an “Overweight” rating with a €220 price target, arguing that the risk-reward profile has improved markedly after the recent selloff. He views the upcoming Sapphire conference as a prime moment for management to demonstrate tangible progress on artificial intelligence. Goldman Sachs shares a similar conviction, maintaining its buy recommendation on the back of the cloud backlog’s rapid expansion.

Others remain unconvinced. JP Morgan holds at “Neutral” with a €175 target. Analyst Toby Ogg acknowledged the better-than-expected cloud order book in the first quarter but flagged a concern: full-year group growth is expected to merely match last year’s pace rather than accelerate. The DZ Bank goes further, sticking with a sell rating, citing a battered chart pattern and broader weakness across the software sector.

The first-quarter numbers themselves paint a clear picture of operational momentum. Cloud revenues rose 27% on a currency-adjusted basis, while operating profit climbed 17%, pushing the margin higher. The cloud order backlog — a key forward-looking metric — hit €21.93 billion, up roughly a quarter after adjusting for currency swings. Earnings per share came in at €1.66 for the opening quarter. The one blemish was total revenue, which fell short of market expectations.

Management is holding firm on its full-year 2026 guidance. The company continues to target cloud revenue between €25.8 billion and €26.2 billion, alongside a double-digit billion figure for operating profit. Those forecasts, however, come with two explicit conditions: a de-escalation of tensions in the Middle East and the completion of the Reltio acquisition.

That acquisition is central to SAP’s longer-term AI ambitions. Reltio’s technology cleanses and consolidates corporate data from disparate sources into unified datasets — a prerequisite for deploying artificial intelligence effectively. The deal is expected to close in the second or third quarter, pending regulatory approvals. Once completed, Reltio will be folded into SAP’s existing data cloud.

Beyond M&A, the company is building out its AI ecosystem through partnerships. A new collaboration with Tangible Growth aims to link process intelligence from the Signavio platform directly with strategic corporate objectives, enabling real-time adjustments to operational deviations. Separately, SAP is helping Japanese technology group NEC transform into an AI-driven enterprise, using autonomous agents from the Joule platform — systems that SAP has already embedded into more than 35 of its own solutions. These agents are designed not just to automate business processes but to steer them independently.

CEO Christian Klein has framed this moment as the beginning of a new era, one where value-generating AI applications supersede pure cloud infrastructure. The Sapphire conference, which kicks off shortly, will be the stage for what the company describes as significant portfolio changes. Concrete product announcements could help the stock distance itself from the April lows.

Technically, the immediate hurdle sits just above €150. The stock needs to clear that level decisively to break the downward trend that has dominated for months. For now, the 50-day moving average near €156 remains a stubborn ceiling.