SAP’s Cloud Engine Purrs but AI Doubts Linger: Can Autonomous Finance and Dremio Turn the Tide?

SAP's strong Q1 cloud growth and AI push contrast with 44% stock decline. DZ Bank rates Buy with €200 target; RSI at 82.3 signals caution.

The disconnect between SAP’s operational trajectory and its stock performance is becoming harder to ignore. While the German software giant reported a 25% jump in its current cloud backlog and raised margins in the first quarter, its shares continue to trade near 52-week lows — down 0.73% on Wednesday to €149.74. That leaves the stock nursing a year-to-date loss of roughly 26% and a 12-month slide of nearly 44%, far from the €271.60 peak reached last year.

What makes the sell-off puzzling is the underlying business momentum. SAP’s cloud revenue expanded 27% in constant currency in the first quarter, with the cloud ERP suite growing even faster at 30%. The IFRS operating result rose to €2.74 billion from €2.33 billion a year earlier, while the non-IFRS figure climbed 24% to €2.87 billion. Management reaffirmed full?year guidance calling for cloud revenue of €25.8?26.2 billion, cloud?plus?software sales of €36.3?36.8 billion, non-IFRS operating profit of €11.9?12.3 billion, and free cash flow around €10 billion.

Yet the market remains unconvinced that SAP can defend its ERP franchise against the threat of specialised AI tools — a narrative analysts have dubbed the “SaaS apocalypse.” To counter that fear, SAP has turned up the volume on its own AI story. On 27 May the Walldorf?based company unveiled the SAP Autonomous Suite, placing “Autonomous Finance” at its centre. Instead of generic chatbot promises, SAP detailed how AI agents and assistants would be embedded in planning, treasury, closing, compliance, tax, billing and revenue processes, tied to end?to?end workflows with defined rules and human oversight.

Concrete proof of enterprise?scale AI adoption is already emerging. Telecoms equipment maker Ericsson has moved beyond a pilot and now deploys SAP’s “Business Data Fabric” across its entire data landscape, with 85,000 employees using the AI copilot Joule productively. The deal gives SAP a marquee reference for scaling AI inside large organisations. In parallel, the company is extending its international reach: Colombian motorcycle manufacturer Grupo UMA is migrating its entire value chain to SAP, spanning production, finance and warehouse management. Its CTO described the software as the “fundamental backbone” for efficiency gains in assembly and sales.

DZ Bank analyst Johannes Schaller sees value in the current price. He maintains a “Buy” rating with a €200 target, pointing to a price?to?earnings ratio of 18.3 as attractive. In his view, the integration of AI into core processes acts as a growth accelerator, not a threat.

The next structural catalyst could be the acquisition of data?platform provider Dremio, expected to close in the third quarter of 2026. The deal is designed to let SAP weave non?SAP data seamlessly into its AI models, a capability that, if successful, could silence the doubters once and for all.

For now, though, the technical picture cautions against near?term euphoria. The relative strength index sits at 82.3, marking the shares as overbought. They are only 9% above the 52?week low of €137.62, having lost 25.74% since the start of the year. The market’s central question remains whether the Autonomous Finance positioning and the Dremio pipeline will translate into measurable demand — or whether SAP’s cloud resilience will continue to be overshadowed by AI anxiety. The next quarterly report will provide the first real test.