SAP’s Cloud Boom Meets Oracle’s $95 Billion Capex Shock: Why the Stock Is Stuck Near Its Floor

SAP shares trade near 52-week low after Oracle-driven selloff. Bernstein reaffirms buy with €273 target. Strong cloud growth offsets macro and technical risks.

SAP shares are trading just above their 52-week floor at €138.38, having shed roughly 45% of their value over the past twelve months. Yet Bernstein sees that as a buying opportunity like few others. The research house has reaffirmed its buy rating with a price target of €273.00 — implying a potential upside of almost 97% from current levels. The case for such optimism lies in SAP’s own operating numbers, which tell a markedly different story from the market’s recent punishment.

The selloff that dragged the stock to within three percent of its 52-week trough has little to do with Walldorf itself. The trigger came from Oracle. On June 11, the US rival unveiled capital expenditure plans for fiscal 2027 ranging between $90 billion and $95 billion, far above the analyst consensus of roughly $68 billion. The market interpreted the news as a warning: if even a strong Oracle quarter is being burdened by massive AI infrastructure costs, other enterprise software players could face similar margin pressure. SAP dropped about 4% that day, making it the weakest performer in the DAX. The pressure was compounded by UBS downgrading the entire European IT sector.

None of that changes the fact that SAP’s first-quarter 2026 performance was robust. Cloud revenue expanded 27%, total sales reached €9.6 billion, and operating profit climbed 24% to €2.9 billion. The cloud backlog swelled to €21.9 billion — a metric that signals future recurring revenue. JPMorgan, however, is cautious about the near-term momentum in that same segment, warning that the growth pace may slacken. That matters because the entire corporate transformation now hinges on the cloud, even if the longer-term “Autonomous Enterprise” AI vision remains intact.

The technical picture offers no immediate relief. The stock is trading roughly 26% below its 200-day moving average of €186.59, and the relative strength index sits at 37 — technically oversold but not yet a reversal signal. Market technicians see a consolidation range between €135 and €155, with the €135 support level as the critical line in the sand. A break below that would leave the stock without a clear floor.

Adding to the macro headwinds, new Federal Reserve chair Kevin Warsh has signalled that rate hikes could be on the table. Higher interest rates structurally weigh on growth stocks by discounting future cash flows more aggressively, and a software name like SAP feels that double hit acutely.

There is one silver lining for patient investors: the dividend yield has risen to 1.7%, the highest in three years, purely on the price decline. But the market wants operational proof. To fund potential acquisitions, SAP placed a €3.5 billion euro-denominated bond in late May with maturities of up to seven years. The proceeds are earmarked for general corporate purposes and possible M&A.

The next major catalyst arrives on July 23, when SAP publishes its half-year results. Analysts will focus on two numbers: the cloud backlog and the cloud gross margin. Those will determine whether the company’s AI strategy is generating commercial traction — or whether the investment costs are proving heavier than expected, as Oracle’s example suggests. For now, the stock remains caught between a strong operational base and a sector-wide mood that has turned decidedly sour.